Previously, the Federal Reserve raised interest rates by 25 basis points to the highest level in 16 years, citing persistently high US inflation. Following the rate hike, the Federal Reserve issued a policy statement hinting at the possibility of further rate increases.  

However, gold prices continued to rise as the US dollar and bond yields declined. Yesterday, oil prices fell by about 1% due to lower-than-expected US crude inventories and restrictions on Russian oil exports by European and American authorities. 

Gold>>

Yesterday, as the Federal Reserve raised interest rates, US Treasury yields declined, and gold prices climbed to this week’s high. In the US market’s closing session, spot gold closed at $1971.91 per ounce, rising $7.23 or 0.37%. It reached a high of $1978.41 and a low of $1961.96 during the trading session. 

The Federal Reserve announced a 25 basis point increase in its policy rate target range, making it the 11th rate hike out of the past 12 meetings. The policy statement left room for further rate increases. 

Currently, gold is trading around $1960, caught in a tug of war between bulls and bears, lacking a clear direction and pace. However, the bearish pressure seems evident on the upside, with rebound highs gradually moving lower while lows keep refreshing, indicating a slight advantage for the bears.  

With the Federal Reserve’s rate hike implemented, the overall market remains in a strong bearish trend, implying that short-term rebounds are not a reversal. 

Technical Analysis: 

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

• Key resistance levels to watch on the upside are in the range of 1985-1990. 
• Key support levels to watch on the downside are in the range of 1962-1957. 

WTI Crude Oil >>

In the early Asian session today, WTI crude oil traded near $79.05 per barrel. Yesterday, oil prices retreated as data showed a lower-than-expected decline in U.S. crude inventories.  

Additionally, the Federal Reserve raised interest rates by 25 basis points and left the door open for further rate hikes in its policy statement. The rate increase could raise borrowing costs for businesses and consumers, potentially slowing economic growth and reducing oil demand. 

EIA data indicated that gasoline and diesel inventories also declined less than expected. Despite this, oil prices have been rising for four consecutive weeks, primarily due to signs of tightening supply. The supply tightening is mainly attributed to production cuts by Saudi Arabia and Russia.  

Furthermore, the slow growth in OPEC+ production and U.S. shale oil, along with restrictions on Russian oil exports to Europe and the U.S., has contributed to an overall tightening of the oil supply. 

Intraday, crude oil mostly traded within a narrow range, reaching a high of around $79.7 and then pulling back, with a low of around $78.5. The daily chart shows a small bearish candlestick, indicating that the recent steady rise in oil prices may be undergoing a structural adjustment after yesterday’s small-range oscillation. 

Currently, oil prices face resistance near the $80 psychological level, but the bias remains bullish. If the $80 resistance is overcome, there is potential for further gains towards the April high of around $83.51. 

Technical Analysis: 

Short-term trading strategy suggests focusing on buying on dips and considering short positions on rebounds.  

• Key resistance levels to watch on the upside are between 80.0 to 80.5. 
• On the downside, key support levels to monitor are between 77.0 to 76.5. 

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