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Gold and Oil Rise as Market Focuses on Inflation Data


Gold and Oil Rise as Market Focuses on Inflation Data

Gold

On Monday, gold prices rebounded by 0.56%, supported by a weaker dollar, as Fed officials highlighted rising unemployment risks. Investors are now focusing on US inflation data due later this week, which could influence the Fed’s monetary policy path. Spot gold regained the $2330 level, closing at $2334.38 per ounce.

The dollar fell by 0.3% on Monday, making gold more attractive to investors holding other currencies. The daily chart for the dollar index showed a bearish engulfing pattern, suggesting further downside risk, which could support a gold price rebound.

The main focus this week will be on Friday’s US Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation measure. Today, keep an eye on the US Conference Board Consumer Confidence Index for June.

Gold Technical Analysis:

Yesterday, gold’s technical performance showed a quick dip and stabilization at the $2318 level during the Asian session, followed by a bullish rebound.

In the Asian and European sessions, prices briefly broke above the $2332 level but quickly fell back. Before the US session, gold stabilized around $2320 and then resumed its upward trend, reaching a high of $2334 before closing with a small gain.

Gold and Oil Rise as Market Focuses on Inflation Data

Today’s Focus:

  • Short-term strategy: Favor shorting on rebounds and buying on pullbacks.
  • Resistance: $2342-$2347
  • Support: $2317-$2312

Oil

On Monday, oil prices rose over 1%, driven by strong summer driving demand prospects, Middle East tensions, and drone attacks on Russian refineries. The weaker dollar also contributed to oil’s strength. WTI crude closed up 1.41% at $81.55 per barrel, while Brent crude closed up 1.17% at $85.37 per barrel.

Geopolitical risks in the Middle East and further drone attacks by Ukraine on Russian refineries supported oil prices. The weakening dollar made dollar-denominated commodities like oil more attractive to foreign buyers.

On Monday, the dollar index dropped by over 0.32% to 105.49, marking its largest single-day decline in nearly a week and a half and distancing from the near eight-week high reached last week. Today, watch for US API crude inventory data, geopolitical developments, and comments from Fed officials.

Oil Technical Analysis:

Yesterday, oil prices initially fell but then rebounded strongly from the $80.2 level. During the Asian and European sessions, prices saw minor gains but faced resistance at the $81.1 level and retreated.

Before and after the US session, oil prices quickly fell back to the $80.2 level before making a strong V-shaped recovery, ultimately breaking above previous highs and closing at $81.7, continuing the bullish trend.

Gold and Oil Rise as Market Focuses on Inflation Data

Today’s Focus:

  • Short-term strategy: Favor buying on pullbacks and shorting on rebounds.
  • Resistance: $83.0-$83.5
  • Support: $80.5-$80.0

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