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Gold Prices Edge Up, Fed Hawkishness Leads to Oil Price Surge and Retreat 


In the United States, a slight downward revision of fourth-quarter economic growth provided support for gold prices, leading to a slight increase in gold prices.  

Despite news of a potential extension of production cuts by OPEC+ boosting oil prices to nearly three-and-a-half month highs, Federal Reserve policymakers maintained their stance of not immediately lowering interest rates.  

Increased US crude oil inventories added further pressure, leading to a retreat in crude oil prices after the initial rise. 

Gold >> 

On Wednesday, a slight downward revision of fourth-quarter economic growth in the United States provided support for gold prices.  

Spot gold briefly fell below the USD 2025 mark before rebounding to surpass USD 2037 and ultimately closing up 0.12% at USD 2032.92 per ounce; meanwhile, COMEX April gold futures fell 0.07% to USD 2042.70 per ounce. 

Key data awaited on this trading day includes the US January PCE figures, with market expectations for a 0.4% increase in core PCE month-on-month compared to the previous 0.2%, and an anticipated 2.8% year-on-year increase compared to the previous 2.9%.  

Additionally, initial jobless claims data for the US is expected to show a change of 210,000 people compared to the previous 201,000. Market participants need to monitor changes in expectations for Federal Reserve interest rate cuts. 

Yesterday, gold prices experienced technical fluctuations, initially dipping then rebounding to close higher. During the Asian and European sessions, prices oscillated slightly lower, testing support around USD 2033 before falling further in the afternoon to breach the USD 2024 level.  

However, they stabilized and rebounded, with the US session seeing accelerated upward movement, breaking through the morning’s opening gap at USD 2033 and continuing a strong rebound. Ultimately, during the US session, prices surged above USD 2037 before encountering resistance, leading to volatile closing movements. 

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 2042-2045. 
  • Key support levels to watch in the short term are around 2023-2020. 

WTI Crude Oil >> 

On Wednesday, crude oil surged and then retreated. Despite news that OPEC+ might extend production cuts, supporting oil prices to near three-and-a-half month highs, Federal Reserve policymakers remained firm in their view of not immediately lowering interest rates.  

Additionally, increased US crude oil inventories further pressured WTI crude oil, leading to volatile trading with prices briefly touching USD 79 per barrel before facing resistance and closing down 0.36% at USD 78.41 per barrel; Brent crude oil also fell 0.58% to USD 82.78 per barrel. 

According to the US Energy Information Administration (EIA), crude oil inventories increased by 4.2 million barrels as of February 23, surpassing expectations of a 2.7 million barrel increase.  

Refinery shutdowns and maintenance following January’s winter storms led to a fifth consecutive week of inventory build-up.  

Regarding production cuts, Russian Deputy Prime Minister Novak stated that the OPEC+ Joint Ministerial Monitoring Committee (JMMC) agreed to continue monitoring the market and fulfilling commitments, with further market actions agreed upon if necessary.  

Saudi Energy Minister also indicated that the current OPEC+ production cuts could be extended beyond the first quarter if needed. 

Yesterday, oil prices fluctuated after an initial surge, with prices oscillating before closing down. During the Asian and European sessions, prices briefly retraced and stabilized around the USD 77.8 level before rebounding.  

During the US session, bullish momentum led to a strong upward movement, breaking through the USD 79 level, but prices faced resistance and retreated to around USD 79.6 before falling.  

Overnight, prices experienced downward pressure, briefly dipping to the USD 78 level before rebounding and closing with volatile movements. 

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 79.2-79.7. 
  • Key support levels to monitor in the short term are around 77.2-76.7. 

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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