After last week’s release of the U.S. non-farm payroll report as scheduled, spot gold plummeted by nearly USD 30; the U.S. dollar sharply rose against all major currencies, and high interest rates in the short term seem to continue to prevail in major economies such as the United States and the Eurozone, suppressing oil prices.

Last week, both WTI crude oil and Brent contracts fell by approximately 7%.  

Gold >> 

Last Friday, after the U.S. non-farm payroll report was released as scheduled, spot gold plunged by nearly USD 30, dropping to a low of USD 2027.78, but rebounded towards the end of the session, closing at USD 2039.55 per ounce; COMEX April gold futures settlement price fell by 0.84%, closing at USD 2053.7 per ounce. 

Federal Reserve Chairman Powell indicated that the possibility of a rate cut in March is low, and the market is now expecting a significant rate cut in May. However, the strong non-farm data on Friday made this expectation less realistic.  

ISM is set to release the January service sector PMI report on Monday. Unless there is a significant difference in the overall PMI data, investors may react to the employment data. 

Gold plummeted in a straight line under the negative impact of the non-farm payroll data, accelerating downward in the U.S. session, breaking through the 2040 level, and quickly probing near the 2027 level before weakly rebounding to close. 

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 2054-2057. 
• Key support levels to watch in the short term are around 2030-2027.  

WTI Crude Oil >>  

Last week, the US dollar sharply rose against all major currencies, and the anticipation of high interest rates in the short term, persisting in major economies such as the United States and the Eurozone, suppressed oil prices.  

WTI March crude oil futures closed at USD 72.28 per barrel, with a cumulative weekly decline of 7.34%, marking the largest drop in four months. Brent April crude oil futures closed at USD 77.33 per barrel, with a weekly cumulative decline of 6.77%. 

Concerns about Middle East supply persisted amid increased Red Sea military actions, while expectations for the OPEC+ meeting also kept traders cautious, leading to a decline in oil prices last week.  

OPEC+ performance in reducing production at the end of 2023 was mediocre, a key point of contention in oil price debates as it indicated a lower-than-expected level of market tightness in 2024.  

OPEC stated that it will adhere to production cut plans this quarter as the organization seeks to avoid oil oversupply and boost prices. 

Last week, under the dual negative influences of technical and news factors, oil prices experienced three consecutive trading days of suppressed rebound followed by a downward breakthrough and closing below the bottom, with weak consolidation below USD 74.5. 

On Friday, presenting a weak downward trend and breaking through the USD 72 level to close with a downward pressure, indicating a weak bearish trend as prices decisively fell below the 20-day moving average, with further expectations of weak downward momentum in the short term. 

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 73.5-74.0. 
• Key support levels to monitor in the short term are around 71.0-70.5. 

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