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Gold Prices Rise as U.S. Treasury Yields Decline by 0.7%, Oil Prices Continue 5-Week Uptrend 


Inflation data slowed down more than expected, causing a significant decline in U.S. Treasury yields, boosting gold prices by 0.7%. Oil prices climbed on Friday, marking the fifth consecutive week of gains on the weekly chart.  

Investors are optimistic, believing that robust demand and supply cuts will keep oil prices on an upward trajectory. This week’s focus is on the Reserve Bank of Australia’s decision and the Bank of England’s interest rate decision, while also keeping an eye on developments from the Bank of Japan. 

Gold>>

During the Asian session last Friday, spot gold fluctuated slightly higher and is currently trading around $1954.10 per ounce.  

Data from the U.S. Commerce Department last week showed that the year-on-year growth rate of core personal consumption expenditure (PCE) slowed to 4.1%, causing a significant decline in U.S. Treasury yields due to the cooling of inflation.  

As a result, gold was boosted and closed up by 0.7%. In addition, Thursday’s data revealed that the U.S. economy grew faster than expected in the second quarter, and initial jobless claims declined, supporting the U.S. dollar but causing gold to drop nearly 1.4%, marking its worst day in nearly a month.  

However, the overnight sharp decline in gold prices attracted some buying interest at lower levels, providing support for gold prices. 

This week, the focus will be on the decisions of the Reserve Bank of Australia and the Bank of England. Following the Bank of Japan’s statement last week about flexibly controlling 10-year government bond yields, attention will also be on whether the Bank of Japan will signal further measures. 

Yesterday, gold faced a sharp decline after a high pullback and a significant downtrend. During the Asian-European session, prices quickly rose and rebounded from the 1972 level, but later encountered resistance and fell back down after breaking above the 1982 level.  

In the late U.S. session, under the negative impact of initial jobless claims, gold prices experienced a bearish counterattack and accelerated their decline, ultimately breaking through the key levels of 1960 and 1950 and reaching a weak close around 1942. 

Technical Analysis: 

Today’s short-term trading advice for gold suggests focusing on long positions during pullbacks and considering short positions on rebounds.  

  • Key resistance levels in the short term are at 1973-1988. 
  • Key support levels in the short term are at 1950-1942. 

WTI Crude Oil>>

In the early Asian session today, WTI crude oil traded near $80.36 per barrel. Last Friday, oil prices climbed as the weekly trend continued for the fifth consecutive week. Saudi Arabia is expected to extend its voluntary production cut plan until September, supporting oil prices due to healthy demand and supply reductions. 

Expectations of major central banks, such as the Federal Reserve and the European Central Bank, nearing the end of their policy tightening actions, have boosted the outlook for global economic growth and energy demand, increasing risk appetite in broader financial markets.  

Supported by the OPEC+ oil-producing alliance’s announcement of supply cuts earlier this month, both benchmark crude oils rose by nearly 5%, marking the fifth week of consecutive gains. 

Last Friday, oil prices maintained a strong bullish rebound, with the Asian and European sessions witnessing a slight upward move near the $79.5 level. During the late US session, oil prices quickly surged above the $80.2 level before retreating to stabilize around the $79 integer level.  

Ultimately, crude oil experienced a strong rebound in the early morning, breaking above and sustaining its position above the $80 level, continuing its bullish momentum. The daily chart remains in a strong bullish trend, with short and medium-term moving averages aligned upward and diverging. 

Technical Analysis: 

Short-term trading strategy suggests focusing on long positions on pullbacks, with short positions as a secondary option. 

  • Key resistance levels to watch in the short term are between $81.0 to $83.3. 
  • Key support levels to watch in the short term are between $79.0 to $78.3. 

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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