The Fed’s interest rate cut expectations continue to heat up, the US dollar touches a five-month low, gold price sees a fourth consecutive rise, hitting a three-week high; some companies resume operations on the Red Sea route, oil prices erase the previous day’s gains, dropping nearly 2%.
On Wednesday, bets on a Federal Reserve interest rate cut continued to increase. Coupled with US Treasury yields hitting multi-month lows and the safe-haven function of gold becoming more prominent, the gold price continued to rise.
Spot gold reached its highest point since December 4th at USD 2084.36 per ounce during the session, closing at USD 2077.47. Gold futures rose by USD 23.3 per ounce compared to the previous trading day, closing at USD 2093.1 per ounce, with a gain of 1.13%.
The heightened geopolitical tensions enhanced gold’s attractiveness as a safe haven for market participants. Recent US data has provided little support for the US dollar, which continued to weaken after a series of US data releases.
This led market participants to once again raise expectations of a US interest rate cut in 2024, putting pressure on the US dollar index, which touched a five-month low. The weakness of the US dollar tends to push up prices of precious metals priced in dollars.
After a narrow consolidation in the technical range of 2061-2066, gold experienced a strong upward trend in the late US session, breaking through the high.
After 22:00, it quickly rose to the 2075 level based on the 2065 support, reaching a recent rebound high. In the early morning, it accelerated further to the 2084 level before pulling back, closing strongly.
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 2085-2090.
- Key support levels to watch in the short term are around 2065-2060.
WTI Crude Oil >>
On Wednesday, optimism prevailed among people regarding the possibility of a US interest rate cut. Meanwhile, the market focused on developments in the Red Sea situation, leading to a nearly 2% decline in international crude oil futures.
WTI crude oil reported USD 74.11 per barrel, a decrease of 1.93% or USD 1.46 per barrel. Brent crude oil reported USD 79.65 per barrel, with a decline of 1.75% or USD 1.42 per barrel. Investors closely monitored the developments in the Red Sea.
Despite another attack on Tuesday, shipments were still returning to the Red Sea. Both Brent and WTI benchmark prices had risen by over 2% in the previous trading day due to concerns about shipping interruptions following the latest attacks on Red Sea vessels.
However, the partial resumption of Red Sea routes by some companies alleviated concerns about supply disruptions, leading to a decline in oil prices, erasing the gains from the previous day.
On the technical side, oil prices faced resistance around the USD 75.6 level, experiencing a slight rebound but ultimately encountering pressure, resulting in a fluctuating downtrend closing below the previous bottom.
During the Asian and European sessions, prices oscillated in the range of USD 74.2 – USD 75.4, with a back-and-forth movement. In the late US session, there was a second rebound attempt, facing resistance around the USD 75.4 level, leading to a weak pullback and closing below the previous bottom.
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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