Rising U.S. Treasury yields put pressure on gold, causing its price to hover around a five-month low. Concerns about the global economy still remain, leading to an initial over 1% increase in oil prices before a reversal, ending a two-day upward trend.
The market’s attention is centered on the symposium in Jackson Hole, Wyoming, where expectations are set for hawkish statements from the Federal Reserve.
Gold prices hovered near a five-month low on Monday, pressured by the rise in U.S. Treasury yields. The market is also focused on Friday’s Federal Reserve Jackson Hole symposium, hoping for further clarity on the interest rate path.
Intraday, gold hit a new low since March 13th, at $1884.70 per ounce, as robust economic data increased bets on a long-term rise in the U.S. federal funds rate, thereby reducing demand for non-yield assets like gold.
Analysts noted, “The U.S. dollar index staying above 103 makes progress for assets like gold quite challenging. The market’s attention is on the annual global central bank conference held in Jackson Hole, Wyoming.”
Following the opening on Monday, gold retraced to around $1884 and continued to hover around $1890. However, after an unexpected surge to $1898 during the U.S. session, it began to retreat, touching around $1885, forming a triple-bottom pattern.
Today’s recommended strategy suggests prioritizing short positions on higher rebounds, with taking long positions on minor dips as a secondary approach.
- Key resistance levels to watch in the short term are around 1900-1905.
- Key support levels to watch in the short term are around 1885-1880.
WTI Crude Oil
Crude oil halted its two-day gains, initially rising over 1% intraday before turning downward. Brent crude futures closed at $84.46, marking a 0.4% decline, while U.S. crude oil futures settled at $80.72 per barrel, down 0.65%.
Reduced crude oil exports from Saudi Arabia and Russia, leading to a tightening of global supply, coupled with concerns about global demand growth amid a high-interest-rate environment, are key factors.
Market analysts cited preliminary data from ship tracking company Kpler, stating that OPEC+ crude oil exports for August are set to decline for the second consecutive month. “Overall supply is decreasing while demand is rising. OPEC+ can maintain control unless there is an economic recession, slowdown, or decline in demand.”
Despite the anticipated slowdown in U.S. production and divergent views on Federal Reserve interest rate policies, short-term oil prices could experience upward fluctuations, possibly reaching near $83.5. However, lingering global economic worries might limit oil price gains, with minimal data releases throughout the day.
Today’s short-term trading strategy suggests focusing primarily on short positions during higher rebounds, while considering long positions on minor dips as a secondary approach.
- Key resistance levels to monitor in the short term are around 81.5-82.0.
- Key support levels to monitor in the short term are around 79.0-79.5.
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