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Federal Reserve Meeting Minutes Turn Hawkish Again, Gold Price Drops Over USD 40, Oil Prices Decline for Third Consecutive Day


The latest meeting minutes from the Federal Reserve show that policymakers acknowledge disappointment with recent inflation figures.

Driving up the dollar and Treasury yields, prompting profit-taking among gold bulls, and putting pressure on gold prices, causing a drop of over USD 40.

Gold >>

Federal Reserve officials suggest that inflation persists, possibly delaying interest rate cuts, reigniting concerns about oil demand, leading to a third consecutive day of oil price declines, down over 1%.

On Wednesday, the minutes from the latest Federal Reserve meeting revealed that policymakers acknowledge disappointment with recent inflation figures.

Driving up the dollar and Treasury yields, prompting profit-taking among gold bulls, and significantly depressing gold prices.

Spot gold saw a sharp pullback, dropping over USD 40, consecutively breaking through key support levels, ultimately closing down 1.74% at USD 2378.75 per ounce, marking a new low since May 17th.

The minutes from the Federal Reserve meeting on April 30th to May 1st indicated that officials believe it will take longer than previously expected to have greater confidence in inflation falling towards 2%.

Recent economic data has shown a downward trend in inflation, but Federal Reserve policymakers suggest waiting a few more months to ensure that inflation is truly on track to return to the 2% target before considering interest rate cuts.

The US dollar index rose 0.3% to a one-week high, making gold more expensive for holders of other currencies. Yesterday, gold faced downward pressure in technical trading amid volatility, closing below support levels.

During the Asian-European session, prices slightly rebounded but were capped below the 2426 level, then weakened further, reaching around 2404 in the afternoon before a rapid rebound.

 In the late US session, a second attempt to push higher was met with resistance around the 2415 level, leading to accelerated downward movement.

Ultimately resulting in consecutive declines in gold prices on the hourly chart, breaking through the 2390 level and reaching a weak close near 2374.

Technical Analysis:

Today’s short-term strategy for gold suggests prioritizing short positions during rebounds, with long positions considered as a secondary approach during pullbacks.

  • Key resistance levels to watch in the short term are around 2400-2405. 
  • Key support levels to watch in the short term are around 2370-2365. 

WTI Crude Oil >>

On Wednesday, Federal Reserve officials indicated that inflation persists, possibly delaying interest rate cuts, reigniting concerns about oil demand, leading to a third consecutive day of oil price declines.

WTI crude oil ultimately closed down 1.22% at USD 77.2 per barrel, while Brent crude fell 1.01% to USD 81.66 per barrel.

The Federal Reserve meeting minutes revealed that officials admitted disappointment with recent inflation figures but also stated they still believe price pressures will ease, albeit at a slower pace.

The U.S. Energy Information Administration (EIA) reported that crude oil inventories increased by 1.8 million barrels as of May 17th, reaching 458.8 million barrels, contrary to analysts’ expectations of a decrease of 2.5 million barrels.

The American Petroleum Institute (API) data showed a build of 2.48 million barrels in crude oil inventories last week.

Yesterday, oil prices faced downward pressure in technical trading during the Asian-European session, rebounding weakly but being capped below the USD 78.4 level, leading to a close below support levels.

The daily candlestick chart indicated consecutive declines, forming a bearish pattern over the past three trading days.

Technical Analysis:

Today’s crude oil trading strategy suggests prioritizing short positions during rebounds, with long positions considered as a secondary approach during pullbacks

  • Key resistance levels to monitor in the short term are around 78.6-79.0. 
  • Key support levels to monitor in the short term are around 76.0-75.5. 

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Doo Prime has provided these forward-looking statements based on all current information available to Doo Prime and Doo Prime’s current expectations, assumptions, estimates, and projections. While Doo Prime believes these expectations, assumptions, estimations, and projections are reasonable, these forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond Doo Prime’s control. Such risks and uncertainties may cause results, performance, or achievements materially different from those expressed or implied by the forward-looking statements.   

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Disclaimer   

While every effort has been made to ensure the accuracy of the information in this document, DOO Prime does not warrant or guarantee the accuracy, completeness or reliability of this information. DOO Prime does not accept responsibility for any losses or damages arising directly or indirectly, from the use of this document. The material contained in this document is provided solely for general information and educational purposes and is not and should not be construed as, an offer to buy or sell, or as a solicitation of an offer to buy or sell, securities, futures, options, bonds or any other relevant financial instruments or investments. Nothing in this document should be taken as making any recommendations or providing any investment or other advice with respect to the purchase, sale or other disposition of financial instruments, any related products or any other products, securities or investments. Trading involves risk and you are advised to exercise caution in relation to the report. Before making any investment decision, prospective investors should seek advice from their own financial advisers, take into account their individual financial needs and circumstances and carefully consider the risks associated with such investment decision.

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