The market is betting that the Federal Reserve will no longer raise interest rates, causing the U.S. dollar to fall to a three-month low. Gold prices continue their upward trend, reaching a new high in six months.
Optimism in the market is boosted by the softening U.S. dollar and expectations of a potential extension of ongoing production cuts at the OPEC+ meeting, leading to a rise of over 2% in crude oil prices.
On Tuesday, spot gold closed up 1.33%, marking the fourth consecutive trading day of gains, settling at $2041.05 per ounce. December gold futures gained $27.60, a 1.4% increase, closing at $2040 per ounce, reaching a six-month high not seen since mid-May.
The market widely anticipates that the Federal Reserve will maintain interest rates in December, with a roughly 50% likelihood of a rate cut in May next year.
The decreased opportunity cost of holding interest-free assets due to lower rates enhances the appeal of gold. The U.S. dollar index touched its lowest point since late August, making gold more affordable for overseas buyers.
Gold exhibited a volatile upward trend today, stabilizing and rising around the $1911 mark before surging. After hovering around the $1920 level, gold broke through the daily high point of $2009, closing above it.
The daily chart driving the second wave of upward movement opens up further space for potential gains. In the short term, gold continues to maintain a strong posture, breaking through to around $2040 after a prolonged consolidation period.
Today’s short-term strategy for gold suggests a primary focus on establishing long positions during pullbacks and considering short positions on high rebounds.
- Key resistance levels to watch in the short term are around 2050-2055.
- Key support levels to watch in the short term are around 2020-2025.
WTI Crude Oil >>>
On Tuesday, international oil prices snapped a four-day losing streak, recording the first gain since OPEC+ postponed its meeting, and Brent crude reclaimed the $80 per barrel mark. WTI crude oil futures rose by $1.55 per barrel, a 2.07% increase, closing at $76.41 per barrel, while Brent crude oil futures gained $1.70 per barrel, a 2.1% increase, closing at $81.68 per barrel.
OPEC and its allies, including Russia, are set to convene a remote meeting on Thursday primarily to discuss production levels for 2024. Originally scheduled for Sunday, the meeting was delayed due to disagreements on production targets for 2024.
Market expectations are widespread that the prolonged five-week slump in oil prices, the longest since 2021, has prompted OPEC+ members to compromise. The meeting is anticipated to continue support for ongoing production cuts, with a particular focus on the possibility of Saudi Arabia and Russia agreeing to further reduce oil output.
Crude oil rebounded swiftly, recovering within the range and testing the previous low at $73.80. During the U.S. session, it traded repeatedly, stabilizing above the $74.7 level, witnessing bullish acceleration. In the early morning hours, oil prices surged, breaking through the $76.2 level but facing resistance, leading to a retracement and oscillating closure.
Today’s crude oil trading strategy suggests a primary focus on establishing long positions during pullbacks and considering short positions on high rebounds.
- Key resistance levels to monitor in the short term are around 78.0-79.0.
- Key support levels to monitor in the short term are around 75.0-74.0.
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