Unexpectedly cold U.S. September ADP employment numbers have sparked market concerns about the Federal Reserve maintaining high-interest rates for the long term. 

Gold prices have fallen for the eighth consecutive day, reaching a 7-month low, while oil prices plunged by over 5%, marking their largest single-day drop in 15 months. The market is now awaiting nonfarm payroll data. 

Gold >> 

In an unexpected turn of events, the U.S. ADP employment report for September showed a mere 89,000 job additions, falling significantly short of the expected 153,000 and the previous month’s 177,000. This marks the smallest increase since January 2021.  

Gold prices experienced a short-lived uptick of $5, reaching the $1830 level before retracing. In the U.S. market, gold dipped 0.09%, or $1.62 per ounce, closing at $1821.19 per ounce.  

December gold futures fell 0.36%, settling at $1834.80 per ounce, nearing the closing price of $1834.60 per ounce on November 22, 2022. 

The surge in U.S. bond yields to the highest level in 16 years, coupled with overall dollar strength, has raised concerns in the market about the Federal Reserve maintaining high interest rates.  

This has put pressure on products like gold, which do not offer interest payments and are priced in dollars. As a result, gold prices have declined for the eighth consecutive day, reaching a 7-month low. 

From a technical perspective, gold initially experienced a dip in the Asian session, dropping near the $1815 level before staging a rebound.  

In the afternoon, it continued to bounce back, reaching above $1825 and entering a sideways consolidation phase. During the late U.S. session, there was a minor acceleration, briefly breaking through the $1833 level before retracing and closing in a range. 

Technical Analysis: 

Today’s short-term strategy for gold suggests a focus on short positions during rebounds, with long positions considered as a secondary option during pullbacks. 

• Key resistance levels to watch in the short term are around 1833-1838. 
• Key support levels to watch in the short term are around 1810-1805. 

WTI Crude Oil >> 

On Wednesday, in the U.S. market, WTI crude oil closed at $84.22, marking a significant decline of $5.01 or 5.61%. Brent crude oil settled at $85.81 per barrel, down $5.11 or 5.62%. Calculated from the daily lows, both major crude oil futures experienced drops of over $5, leading to a cumulative decrease of approximately $10 in oil prices since last Friday. 

Despite Saudi Arabia and Russia reaffirming their commitment to continue the production cuts until the end of the year, rising global interest rate expectations, deteriorating market sentiment, and weak gasoline demand revealed in U.S. data contributed to the sharp oil price decline, exceeding 5%.  

This marks the largest drop since July 2022. Additionally, the outlook for demand growth is under pressure, putting significant downward pressure on international oil prices. 

In terms of technical analysis, crude oil experienced a retracement with a bearish candlestick pattern on Wednesday, forming a series of consecutive declines from the recent highs and returning to the $88.30 support level. The closing prices approached the day’s lows and failed to regain lost ground, resulting in consecutive daily declines. 

Technical Analysis: 

Today’s crude oil trading strategy suggests focusing primarily on long positions during pullbacks, with short positions considered as a secondary option during rebounds. 

• Key resistance levels to monitor in the short term are around 87.0-88.0. 

• Key support levels to monitor in the short term are around 83.0-82.0. 

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