The market maintains an optimistic outlook on the Federal Reserve’s interest rate cut. Prior to the release of key economic data, investors’ risk appetite is increasing. The yield on the 10-year U.S. Treasury bond has dropped to its lowest level since July, while gold has experienced a slight decline of 0.25%.  

The suspension of shipping in the Red Sea continues to support oil prices, but U.S. inventory growth exceeds expectations, causing international crude oil to rebound slightly and close higher. 

Market attention is shifting to upcoming data releases, including the final GDP figures for the United States, changes in initial jobless claims, and personal consumption expenditure data. 

Gold >> 

On Wednesday, ahead of the release of the November Core Personal Consumption Expenditures Price Index (PCE) data in the United States, the price of gold slipped slightly below USD 2,040. Spot gold is reported at USD 2,035.23 per ounce, with a intraday decrease of 0.25%.  

Market focus is shifting to upcoming data releases, including the final GDP figures for the United States, changes in initial jobless claims, and personal consumption expenditure data.  

Due to ongoing market speculation that the Federal Reserve will cut interest rates earlier in 2024, the price of gold has been maintained within the trading range established over the past week.  

Federal funds futures prices indicate a 67.5% likelihood of a 25-basis-point rate cut in March, up from the previous day’s 62.7%.  

Despite warnings from some Federal Reserve officials that there is still uncertainty about the timing of interest rate hikes in the face of high inflation in the United States. On the technical side, gold faced downward pressure and entered a correction phase amid volatile trading.  

After a strong rebound above the USD 2,040 level on Tuesday, there was no continuation of the upward momentum.  

Instead, during the early Asian-European session yesterday, it faced resistance near the USD 2,043 level, leading to a downward pressure and decline. In the late U.S. session, it quickly broke below the USD 2,030 level and experienced a rebound before closing with fluctuations.

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 2047-2052. 
• Key support levels to watch in the short term are around 2015-2020. 

WTI Crude Oil >> 

On Wednesday, international oil prices experienced a high followed by a retreat, influenced by the increase in U.S. crude oil inventories.  

However, the ongoing risk of disruption in the Red Sea shipping channel continues to provide support to oil prices, helping them stay above the 21-day moving average. WTI crude oil closed up by 0.4%, reaching USD 74.22 per barrel. Brent crude oil also increased by 0.59%, closing at USD 79.70 per barrel. 

While oil prices rose on Wednesday, an unexpected increase in U.S. crude oil supply dampened the upward momentum, raising concerns about global production surpassing demand.  

In the week ending December 8, U.S. crude oil inventories unexpectedly increased by approximately 2.9 million barrels, contrary to expectations of a decrease of about 2.3 million barrels.  

Gasoline inventories, one of the products refined from crude oil, increased by around 2.7 million barrels, compared to an expected increase of 1.2 million barrels. Distillate fuel inventories also increased by 1.5 million barrels, exceeding the expected increase of 496,000 barrels. 

From a technical perspective, crude oil stabilized above USD 73.90 during the Asian-European session, continuing its bullish trend. In the afternoon, it further accelerated, breaking through the USD 75 level and entering a high-level consolidation.  

In the late U.S. session, there was a second upward push, breaking through the USD 75.30 level, followed by a retreat and a close below the previous low. 

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 75.0-76.0. 
• Key support levels to monitor in the short term are around 72.0-71.0. 

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