Last week’s economic data diminished the market’s speculation of further interest rate hikes by the Federal Reserve, weakening gold’s position as the U.S. dollar strengthened, causing it to hover near a one-month low.  

Strong demand and tightening supply continued to support oil prices, leading to further gains in crude oil, marking a seven-week consecutive increase. 

Gold >> 

The opening price of gold declined, currently trading at $1911.50 per ounce, with an intraday decrease of 0.15%. Last week, spot gold closed at $1913.76 per ounce, reaching an intraday low of $1910.87 and a high of $1915.08. 

Gold faced pressure from the strong U.S. dollar last week, declining to $1910 as hawkish Federal Reserve stance remained a significant resistance for upward movement.  

On Friday, gold lingered near a one-month low, and the weekly trend is poised for a third consecutive week of decline, driven by the rise in the U.S. dollar and Treasury yields following data indicating a July increase in producer prices. 

In the previous meeting, the Federal Reserve decided to raise the policy rate by 25 basis points. Since this decision, July nonfarm payrolls and CPI data have not significantly altered the market’s pricing of the Fed’s rate outlook. The U.S. Labor Department stated that the July final demand PPI rose by 0.3%, with a 0.8% growth over the preceding 12 months.  

Market attention is on the release of minutes from the Fed’s July policy meeting on Wednesday. According to the Chicago Mercantile Exchange Group’s FedWatch Tool, the market still perceives a slightly higher than 20% probability of the Fed raising policy rates again in 2023. 

Technical Analysis: 

Today’s short-term strategy for gold suggests a focus on shorting during rebounds and buying during pullbacks. 

• Key resistance levels to watch in the short term are around 1923-1928. 
• Key support levels to watch in the short term around 1903-1898. 

WTI Crude Oil >> 

Last Friday, oil prices surged as the International Energy Agency (IEA) forecasted record global demand and tightening supply. This droves oil prices to a seventh consecutive weekly increase, marking the longest such streak since 2022.  

The IEA estimated global oil demand at a record 103 million barrels per day in June, with the potential for further increases this month. Concurrently, reductions in output from Saudi Arabia and Russia are expected to lead to significant inventory declines for the remainder of 2023, potentially pushing oil prices higher, according to the IEA. 

Last Thursday, the Organization of the Petroleum Exporting Countries (OPEC) announced an unchanged projection of a 2.44 million barrels per day increase in global oil demand for this year. OPEC noted a positive outlook for the oil market in the latter half of the year, driven by supply cuts and improved economic prospects, which has buoyed investor sentiment. However, signs of waning momentum have emerged after the sustained price uptrend. 

Crude oil demonstrated an oscillating upward movement last week, with the weekly low touching $79.9 per barrel and the high reaching $84.8 per barrel. The weekly closing displayed a doji star pattern around $83 per barrel. From a weekly perspective, oil prices remain at the upper bound, signaling a prevailing bullish trend. 

Technical Analysis: 

Today’s short-term trading strategy suggests prioritizing short positions on rebounds, with long positions on pullbacks as secondary. 

• Key resistance levels to monitor in the short term are between 83.5 and 84.0. 
• Key support levels to monitor in the short term are between 81.3 and 80.8. 

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