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Gold Prices Hover at Six-Week Lows, Fitch Issues Downgrade Warning, Crude Oil Slides


In July, U.S. retail sales exceeded expectations, leading to a rise in U.S. bond yields and the U.S. dollar, causing gold prices to drop to their lowest level in over a month.  

S&P issued signals of potentially downgrading credit ratings for dozens of U.S. banks, dampening trader sentiment in the oil market, which subsequently resulted in a decrease in crude oil prices. 

Gold >> 

Gold prices dropped to their lowest level in over a month, reaching $1896.20, as robust U.S. retail sales in July led to a surge in U.S. Treasury yields and the U.S. dollar, which suppressed the gold price. 

The latest data from the U.S. Commerce Department indicates a 0.7% growth in retail sales in July, marking the largest increase since the beginning of 2023 and achieving continuous growth for four consecutive months. Retail sales for June were revised to a 0.3% increase. Economists widely anticipated an overall growth of 0.4% for July. 

Gold briefly fell below $1900, touching a low of $1896.20 during the session, and then swiftly rebounded to $1910.06. Its intraday movement showed a slight upward trend after initial suppression. 

Technical Analysis: 

Today’s short-term strategy for gold suggests focusing on buying during pullbacks and considering short positions during rebounds. 

  • Key resistance levels to watch in the short term are around 1912-1917. 
  • Key support levels to watch in the short term are around 1890-1885. 

WTI Crude Oil >>

Crude oil closed lower on Tuesday, currently trading around $80.92 per barrel. Over the past two months, the significant production cuts by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) have driven oil prices upward.  

On Tuesday, credit rating agency Fitch warned that it might downgrade ratings for dozens of U.S. banks, including JPMorgan Chase, which dampened sentiment among crude oil market traders. 

China’s central bank unexpectedly lowered the rates for the Medium-Term Lending Facility (MLF) and reverse repurchase agreements, providing some support to oil prices.  

Additionally, the U.S. Energy Information Administration (EIA) forecasted a second consecutive monthly drop in crude oil and natural gas production in U.S. shale regions in September, reaching the lowest levels since May; shale oil production is anticipated to fall to 9.41 million barrels per day in September.  

However, concerns about the prospects of oil demand recovery persist in the market. The relative strength of the U.S. dollar and bond yields also pose potential risks for further downward pressure on oil prices. 

Technical Analysis: 

Today’s short-term trading strategy suggests focusing on selling at higher rebounds and buying at lower pullbacks.  

  • Key resistance levels to watch on the upside: 82.0-82.5 
  • Key support levels to watch on the downside: 80.0-79.5

Forward-looking Statements    
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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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