Inflation concerns in the United States are rebounding, and the Federal Reserve may maintain high interest rates, suppressing gold prices, which have fallen for the past four weeks. This week will witness a ‘central bank feast’. 

Last week, the prices of WTI crude oil and Brent crude oil futures fell slightly, but they still maintained their recent upward trend, with WTI crude oil rising 3.88% last week. 

Gold >> 

Last week, a multitude of economic data led investors to lower their expectations for a rate cut in the United States, and the pressure on precious metals continued to rise, resulting in the first weekly decline in gold prices in four weeks.  

On Friday, spot gold fell by 0.30%, closing at USD 2155.70 per ounce. Gold prices fell by more than 0.8% last week, marking the first weekly decline since mid-February. In early Asian trading on Monday, spot gold opened slightly lower and is currently trading near USD 2154.75 per ounce. 

Higher-than-expected inflation supports the Federal Reserve in maintaining high interest rates, thereby putting pressure on gold prices.  

Traders have reduced their bets on a rate cut in June, with the CME FedWatch tool currently indicating a 55% probability of a rate cut in June, down from over 70% last week. 

Central banks around the world will be the focus this week, with the Bank of Japan and the Reserve Bank of Australia announcing rate decisions on Tuesday, the Federal Reserve on Wednesday, and the Bank of England and the Swiss National Bank on Thursday. 

On Friday, gold prices rose initially on technical grounds but later fell. During the Asian-European session, prices fluctuated slightly higher around the 2160 level, rebounding.  

In the afternoon, there was further acceleration, breaking through the 2170 level and reaching around 2172 before encountering resistance.  

This led to a retracement lower to fill the gap from the previous 4-hour opening decline. In the late American session, the downward oscillation continued, breaking through the 2160 level and closing weakly. 

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 2170-2176. 
• Key support levels to watch in the short term are around 2170-2176. 

WTI Crude Oil >> 

On Friday, WTI crude oil experienced a slight decline, but it rose by about 3.9% for the week. Concerns about demand growth and supply tightness have driven oil prices higher this week.  

WTI crude oil futures fell by USD 0.22, a decrease of 0.27%, closing at USD 81.04 per barrel, with a cumulative increase of over 3.88% for the week; Brent crude oil rose by USD 0.22, closing at USD 85.26 per barrel. 

Both OPEC and the International Energy Agency (IEA) forecast tightness in the crude oil market this year.  

The IEA has revised its outlook for 2024, anticipating a slight supply shortage rather than an oversupply. The attack on Russian refineries by Ukraine this week also highlights the risks that the Eastern European conflict poses to crude oil production and fuel supply. 

Additionally, a report from the U.S. Energy Information Administration (EIA) indicates that U.S. crude oil inventories have declined for the sixth consecutive week, indicating strengthening domestic crude oil demand. 

From a technical perspective, oil prices on Friday saw relatively minor fluctuations, stabilizing above USD 80.5 and maintaining bullish momentum, with strong oscillations. In the late American session, oil prices surged twice, breaking through the USD 81 level and closing strongly. 

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 82.0-82.5. 
• Key support levels to monitor in the short term are around 80.0-79.5. 

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