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Gold and Oil Prices Up 1% as Market Focuses on PCE Data


Gold

On Monday, gold prices rebounded by nearly 1%, influenced by geopolitical tensions and a weaker dollar.

Ahead of a crucial inflation report due later this week, investor bets on a Federal Reserve rate cut have diminished.

Spot gold continued its rebound, peaking at $2358.52, with a daily gain of over 1%, before closing up 0.73% at $2350.98 per ounce. The dollar index continued to fall, retreating from over a one-week high to 104.59, down 0.1%.

The latest Federal Reserve policy meeting minutes indicated that officials expect the time required to bring inflation down to 2% could be longer than previously anticipated.

Investors are now awaiting the release of the April Personal Consumption Expenditures (PCE) Price Index data on Friday, a key inflation measure for the Federal Reserve.

Technical Analysis:

Yesterday, gold’s technical analysis showed a bottoming out and recovery in volatile trading. During the Asian and European sessions, prices slightly retraced and stabilized around $2338 before rebounding.

In the afternoon, gold traded horizontally around the $2345 mark, accelerating in the evening US session, breaking through the $2350 level and peaking at $2358 before closing lower.

Gold and Oil Prices Up 1% as Market Focuses on PCE Data

Today’s Focus:

  • Short-term strategy: Recommend shorting on rebounds and buying on dips.
  • Resistance: $2364-$2370
  • Support: $2330-$2325

Oil

On Monday, Goldman Sachs raised its forecast for global oil demand in 2030, predicting that due to a potential slowdown in electric vehicle adoption, oil consumption will peak in 2034.

WTI crude accelerated during the European session, closing up 0.99% at $78.52 per barrel, while Brent crude closed up 0.82% at $82.78 per barrel.

Goldman Sachs forecasts that oil demand will peak at 110 million barrels per day in 2034, followed by a prolonged period of stability until 2040.

Eurozone inflation data is set to be released this Friday, with economists expecting it to rise to 2.5%, though this should not prevent the European Central Bank from easing policy next week.

The market is also eyeing the US PCE Price Index, set to be released on May 31, for further indications on interest rate policy. This is the Federal Reserve’s preferred inflation measure.

Technical Analysis:

Yesterday, oil prices showed a bullish rebound in volatile trading. During the Asian and European sessions, prices slightly retraced and stabilized around the $77.7 level before strengthening.

In the evening US session, oil prices accelerated, breaking through the $78.7 level and closing strongly.

Gold and Oil Prices Up 1% as Market Focuses on PCE Data

Today’s Focus:

  • Short-term strategy: Recommend buying on dips and shorting on rebounds.
  • Resistance: $79.4-$80.0
  • Support: $77.0-$77.5

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