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Gold Prices Rise As Dollar Weakens, Oil Markets Focus On Tonight’s OPEC+ Policy Meeting

1. Forex Market Insight  


The eurozone inflation rate rose to its highest level in a decade in August 2021, which puts a test of policymakers’ view that post-crisis inflationary pressures are temporary. Eurozone consumer price index (CPI) rose by 3% year-on-year, exceeding the expectations of all 37 economists surveyed by Bloomberg. Excluding volatile items such as energy and food, the core inflation rate rose 1.6% year-on-year, a record high since 2012.

While global supply constraints are pushing up costs, the price spike in the eurozone is also being driven by one-off factors, such as lower comparative figures in the same period last year. The European Central Bank (ECB) considers the rise in inflation to be temporary, and the eurozone is keeping monetary policy much looser than the Federal Reserve, which is expected to start cutting back soon.

However, from the current point of view, price increases in the eurozone may continue to accelerate. The imported inflation rate in Germany, the region’s largest economy, is currently at 15%. Eurozone retailers plan to boost prices over the next three months, but consumers have also adjusted their response, saying that they are unlikely to make significant purchases in the coming year.

Technical Analysis: 

(EUR/USD 1-hour chart) 

Execution Insight: 

Yesterday, the euro rose and fell, leading the MACD technical indicators into a passivation state. Therefore, there is a possibility that the euro could form a phased top. Today, the top focus is on the suppression of 1.1820, and the bottom is focused on the support of 1.1795 and 1.1779.

GBP Intraday Trend Analysis 

Fundamental Analysis: 

The market will pay attention to a series of U.S. economic data released later this week to measure the strength of the job market – most importantly, the Friday’s employment data. The market will use these data to seek and determine when the Fed may begin to tighten policy. All these data will have a slight impact on the performance of the pound’s market outlook.

Technical Analysis: 

(GBP/USD 1-hour chart) 

Execution Insight: 

The pound pushed higher and fell yesterday, resulting in the technical indicator MACD showing signs of passivation. Therefore, the pound may have formed a phased top. Today, it still maintains the bearish trend. With this, focus on the 1.3771-line of suppression at the top, and pay attention to the strength of support at 1.3721 and 1.3669 at the bottom.

2. Precious Metals Market Insight 


Fundamental Analysis: 

Gold prices rose yesterday on a weaker dollar, but gains slowed as some investors took a wait-and-see approach ahead of the U.S. August Non-Farm payrolls data.

Market interest in gold increased after Fed Chairman Jerome Powell’s dovish speech at the Jackson Hole meeting on Friday,27th August 2021. However, the market remains concerned about the timeline for tapering bond purchases ahead of Friday’s U.S. jobs report, which could raise concerns about earlier cuts in the Fed’s economic support measures.

Technical Analysis: 

(Gold 1-hour chart) 

Trading Strategies: 

The price of gold is currently at a high and weak sideways drift, forming a shock trend from 1808 to 1819. Today, we will pay attention to the breakthrough direction of this interval. If it breaks through the 1819-line, it will open up further upside potential. At that time, we will pay attention to the suppression of the 1831-line. If it falls below the 1808-line, it will open up further downside potential. At that time, pay attention to the support of the 1798 and 1790 positions.

3. Commodities Market Insight 

WTI Crude Oil 

Fundamental Analysis: 

The Organization of Petroleum Exporting Countries (OPEC) and OPEC+, a coalition of its allies, expect the oil market to remain in a supply shortage until at least the end of 2021. Meanwhile, inventories will remain at a relatively low level until May 2022, sources said yesterday.

OPEC+ will hold a policy-setting meeting today, 1st September 2021 at 23:00. This comes after the U.S. pressured the alliance to increase production.

Technical Analysis: 

(Crude oil 1-hour chart) 

Trading Strategies: 

Yesterday, oil prices remained high and fluctuated sideways, resulting in a relatively strong overall willingness to buy from multiple parties. In the overall operation ideas, it is best to continue on maintaining the bullish trend. With this, pay attention to the 66.83 front line. As long as the oil price runs stably above the 66.83-line, it will maintain its bullish trend. Given that, pay attention to the suppression of the 68.57 and 69.75 positions in turn. Once the oil price drops below the 66.83-line, it will possibly open up a greater downside potential.

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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