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Gold Price Falls Over 1% to Reach Two-Week Low, Oil Price Rises Nearly 1%


Yesterday, gold prices declined by over 1% to a two-week low, pressured by a stronger U.S. dollar and rising bond yields following better-than-expected U.S. economic data.  

On the other hand, oil prices closed higher due to supply tightness after OPEC+ production cuts, along with positive factors from increased demand in China and the outlook for global economic growth. 

Gold >>

Strong U.S. economic data and the European Central Bank’s interest rate decision caused a major reversal in the U.S. dollar’s trend yesterday, leading to a significant pullback in gold prices.  

Gold initially rose but faced resistance around $1982 per ounce, and despite two attempts to break through that level, it encountered accelerating selling pressure and dropped to a low of $1945 per ounce.  

Market analysts suggest that with the Federal Reserve mentioning further rate hikes this year, gold prices may experience volatility and struggle to make substantial gains, depending on upcoming data releases. 

The European Central Bank raised interest rates as expected by 25 basis points. However, concerns about a slowdown in the Eurozone economy may persuade the central bank to pause rate hikes going forward.  

Investors will look to ECB President Lagarde for clues on further monetary policy decisions, and the ECB’s hawkish stance could act as resistance for gold prices. 

With negative data from the U.S. market last night and the Federal Reserve’s interest rate hike coming into effect, gold ultimately completed its final bullish wave.  

Subsequently, continuous selling pressure from institutional investors and unsuccessful attempts to breach higher levels caused gold to start declining. The lowest point reached was $1942.02 per ounce, while earlier in the week, gold prices had hit a one-week high of $1982.20 per ounce.  

Spot gold closed on Thursday at $1945.86 per ounce, experiencing a significant drop of $26.05 or 1.32%.

Technical Analysis: 

Today’s short-term trading strategy for gold suggests focusing on selling at high rebound points and buying on minor dips.  

  • Key resistance levels to watch in the short term are around $1958 to $1963. 
  • Key support levels to monitor in the short term are around $1930 to $1935. 

 WTI Crude Oil >>

In the early Asian market today, US crude oil is trading near $79.61 per barrel. Yesterday, oil prices closed higher, rising nearly 1% and recovering from the previous day’s decline.  

US oil briefly surpassed $80 per barrel for the first time since April 20, supported by supply tightness after OPEC+ production cuts and positive factors related to demand and global economic growth prospects.  

Russia’s crude oil trading price exceeded the $60 per barrel upper limit, putting the US government in a policy dilemma. 

Saudi Arabia reduced its production from 10 million barrels per day to 9 million barrels per day in July, marking the largest production cut in years. It also stated that it would extend the production cuts into August.  

The market’s attention is now on the upcoming monthly meeting of the OPEC+ Joint Ministerial Monitoring Committee, focusing on whether Saudi Arabia will extend its voluntary 1 million barrels per day production cut decision into September. If the production cuts continue, it will provide strong support for oil prices. 

Technical Analysis: 

For short-term trading, it is recommended to focus on buying on dips as the main strategy and considering selling on high rebounds as a secondary approach.  

  • Short-term resistance levels to watch are between 80.5 and 81. 
  • Short-term support levels to watch are between 78 and 78.5. 

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. 

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