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 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.
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.
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
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