Gold continues its downward trend, once falling below the 2020 level, but narrowing its decline towards the end of the trading session.  

The market is now focusing on Thursday’s U.S. CPI report; concerns over demand intensify as Saudi Arabia cuts prices, causing oil prices to plummet by over 3% and fall below the USD 70 threshold. 

Gold >> 

On Monday, the price of gold extended its intraday decline, falling close to a two-week low touched after Friday’s optimistic U.S. nonfarm payroll data. Earlier on Monday, gold touched a three-week low at 2016.71.  

Spot gold dropped more than 1% during the trading session, closing down 0.85% at USD 2027.97 per ounce. Gold futures fell 0.8%, settling at USD 2033.5 per ounce. 

The outlook for gold in January is not very optimistic, with market expectations pointing towards a continued decline in gold prices, with a key focus on the crucial level of USD 2000 per ounce.  

As the trading week begins with a lack of significant fresh fundamental news, precious metals traders are turning their attention to external markets, particularly focusing on the December Consumer Price Index (CPI) report and the December Producer Price Index (PPI) report. 

On the technical side, gold experienced a volatile session with a one-sided downward movement in bearish trading. In the Asian session, the opening saw gold pressuring the 2046 level but continuously falling back.  

In the afternoon, the downward momentum accelerated, breaking through the 2030 level and continuing to weaken.  

Approaching the U.S. session, gold prices accelerated their decline, once again breaking through the 2020 level and continuing to weaken towards the vicinity of 2016. In the early morning hours, gold prices staged a strong rebound, surpassing the 2030 level and closing above it. 

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 2035-2040. 
• Key support levels to watch in the short term are around 2015-2010. 

WTI Crude Oil >> 

On Monday, international crude oil settlement prices dropped by over 3% due to significant price cuts by the largest oil-exporting country, Saudi Arabia, and an increase in OPEC production.  

This offset concerns about supply due to escalating geopolitical tensions in the Middle East. U.S. crude oil closed at USD 70.77 per barrel, down 4.12% or USD 3.04 per barrel, with an intraday low of USD 70.12 per barrel. Brent crude oil closed at USD 76.12 per barrel, down 3.35% or USD 2.64 per barrel. 

Market expectations indicate that Saudi Arabia has made unexpectedly large price cuts for crude oil shipments in February, signaling warning signs about the state of the oil market still flashing in Riyadh. 

Increased production from Angola, Iraq, and Nigeria offset the ongoing production cuts by Saudi Arabia and other members of the broader OPEC+ alliance. These factors are expected to lower production and market share in January. 

On the technical side, oil prices faced downward pressure during the Asian and European sessions, continually weakening below the 73.8 level. In the afternoon, there was a further decline below the 73 integer level, reaching the 72.6 level and experiencing a weak rebound.  

In the U.S. session, oil prices faced resistance twice at the 73.2 level, leading to a one-sided downward movement, breaking through the bottom.  

After 23:00 in the evening, oil prices continued to fall, breaking through the integer levels of 71 and 72, reaching around 70.13 before experiencing a weak rebound and closing. 

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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