Search Mark
Home / Market Insight

Gold Price Falls Below 2020 Threshold, Saudi Price Cut Causes Oil Prices to Plunge Over 3%


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. 

Forward-looking Statements    
This article contains “forward-looking statements” and may be identified by the use of forward-looking terminology such as “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “hope”, “intend”, “may”, “might”, “plan”, “potential”, “predict”, “should”, or “will”, or other variations thereon or comparable terminology. However, the absence of such terminology does not mean that a statement is not forward-looking. In particular, statements about the expectations, beliefs, plans, objectives, assumptions, future events, or future performance of Doo Prime will be generally assumed as forward-looking statements.     

Doo Prime has provided these forward-looking statements based on all current information available to Doo Prime and Doo Prime’s current expectations, assumptions, estimates, and projections. While Doo Prime believes these expectations, assumptions, estimations, and projections are reasonable, these forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond Doo Prime’s control. Such risks and uncertainties may cause results, performance, or achievements materially different from those expressed or implied by the forward-looking statements.     

Doo Prime does not provide any representation or warranty on the reliability, accuracy, or completeness of such statements. Doo Prime is not obliged to provide or release any updates or revisions to any forward-looking statements.    

 
Disclaimer    

While every effort has been made to ensure the accuracy of the information in this document, DOO Prime does not warrant or guarantee the accuracy, completeness or reliability of this information. DOO Prime does not accept responsibility for any losses or damages arising directly or indirectly, from the use of this document. The material contained in this document is provided solely for general information and educational purposes and is not and should not be construed as, an offer to buy or sell, or as a solicitation of an offer to buy or sell, securities, futures, options, bonds or any other relevant financial instruments or investments. Nothing in this document should be taken as making any recommendations or providing any investment or other advice with respect to the purchase, sale or other disposition of financial instruments, any related products or any other products, securities or investments. Trading involves risk and you are advised to exercise caution in relation to the report. Before making any investment decision, prospective investors should seek advice from their own financial advisers, take into account their individual financial needs and circumstances and carefully consider the risks associated with such investment decision. 

Share to

Market Insight

Gold Surges USD 30 Intraday, Weak Demand Drags Oil Prices from Gains to Losses 

The market's anticipation of a June interest rate cut by the Federal Reserve grew, leading to a surge in gold prices to a three-month high of USD 2119.79 per ounce, with an increase of approximately USD 30 within the day.  

2024-3-5 | Market Insight

Gold Rises to Two-Month High, Crude Oil Up Nearly 2% 

Lower-than-expected economic data has boosted expectations of interest rate cuts, while the weakening US dollar pushed gold to its highest point in two months last Friday.

2024-3-4 | Market Insight

PCE May Delay Fed Rate Cuts, Boosting Gold Prices and Weighing on Oil 

The US PCE data met expectations, and the slight increase in initial jobless claims in the US provided upward momentum for gold prices, briefly touching a one-month high. 

2024-3-1 | Market Insight