Gold

On June 5, weaker-than-expected US ADP employment data increased the likelihood of a Federal Reserve rate cut later this year, causing US Treasury yields to drop.

The Bank of Canada cut rates by 25 basis points on Wednesday, and the market expects the European Central Bank to follow suit on Thursday, signaling a global trend of rate cuts.

This reduced the opportunity cost of holding gold, pushing prices up over 1%. Spot gold peaked at $2357.44 and closed up 1.23% at $2354.60 per ounce.

US Treasury yields fell to their lowest since April 5 after May ADP data showed employment growth below expectations. The ADP report indicated that private sector jobs increased by 152,000 in May, the smallest gain since January and well below the average of 194,000 over the past year. April’s increase was revised down to 188,000. Economists surveyed by Reuters had forecast an increase of 175,000 jobs.

Gold Technical Analysis:

Yesterday, gold stabilized around the $2325 level, then oscillated upwards. During the Asian and European sessions, prices initially surged, breaking through $2341 before pulling back.

In the afternoon, gold quickly fell to $2328, then rebounded. In the evening US session, gold found strong support at $2328 and surged, ultimately breaking and holding above the $2350 level, closing with a bullish engulfing pattern.

Today’s Focus:

• Short-term strategy: Favor buying on dips and shorting on rebounds.
• Resistance: $2365-$2370
• Support: $2338-$2333

Oil

On Wednesday, US crude and fuel inventories increased, and the hope for a Fed rate cut in September outweighed demand concerns, leading to a rebound from a four-month low.

WTI crude ended a five-day losing streak, closing up 1.93% at $74.24 per barrel, while Brent crude closed up 1.95% at $78.59 per barrel.

The US Energy Information Administration (EIA) reported on Wednesday that US crude inventories unexpectedly increased last week. Despite the start of the summer driving season, gasoline and distillate inventories also rose due to increased refinery activity and decreased demand.

Data showed that for the week ending May 31, US crude inventories increased by 1.2 million barrels, while the market had expected a decrease of 2.3 million barrels. However, this increase was less than the over 4 million barrels reported by the American Petroleum Institute on Tuesday.

Meanwhile, most economists surveyed by Reuters predicted that the Fed would lower the benchmark rate in September and again later this year.

Oil Technical Analysis:

Yesterday, oil prices fluctuated around the $73 level before rebounding. In the evening US session, oil prices slightly rose, closing above the $74 level, showing a short-term support and stabilization around $72.5.

Today’s Focus:

• Short-term strategy: Favor buying on dips and shorting on rebounds.
• Resistance: $75.5-$76.0
• Support: $72.3-$71.8

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