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Gold Prices Reach Weekly Highs, Oil Prices Continue Four-Week Rally


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. 

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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