Due to expectations of the Federal Reserve maintaining higher interest rates for a longer period, rising U.S. bond yields, and overall strength in the U.S. dollar, gold faced price pressure, leading to a decline of nearly $7.
Additionally, global long-term interest rate expectations increased, and weak gasoline demand was revealed in U.S. data, causing a sharp drop in oil prices, with a decline of over 5%.
Due to market expectations of the Federal Reserve maintaining higher interest rates for an extended period, rising U.S. bond yields, and overall strength in the U.S. dollar, gold faced price pressure, resulting in a decline of nearly $7. Gold closed at around $1,814 per ounce.
The upcoming U.S. Nonfarm Payrolls (NFP) report on Friday will be closely watched, as it could provide much-needed support to gold if it falls short of expectations. Otherwise, gold prices may continue to decline.
Thursday’s data laid the foundation for the NFP report, and investors are eagerly anticipating whether Friday’s labor data will solidify expectations of a November Fed rate hike.
Currently, the market prices in a one-in-four chance of the Fed taking action next month. The NFP data on Friday and next week’s inflation data will determine the direction of the 10-year Treasury yields.
From a technical perspective, during the Asian and European sessions, gold quickly rose to test the $1,829 resistance level before retreating.
In the afternoon, it further broke below the $1,820 support and continued to decline, breaching the previous low of $1,815. In the late hours, influenced by a mixed unemployment claims report, gold swiftly dipped below the $1,813 support, only to stabilize and rebound rapidly. It eventually closed with fluctuations around $1,814.
Today’s short-term strategy for gold suggests a primary focus on short positions during rebounds, with long positions during pullbacks as a secondary option.
- Key resistance levels to watch in the short term are around 1830-1835.
- Key support levels to watch in the short term are around 1810-1805.
WTI Crude Oil >>
Global long-term interest rate expectations on the rise, weak gasoline demand as indicated by U.S. data, led to a sharp drop in oil prices, with U.S. crude oil closing near $82.16 per barrel and Brent crude at $84.04 per barrel, down 2.0%.
Uncertain demand outlook overshadowed OPEC+’s decision to maintain oil production cuts, instilling fear among investors and causing oil prices to continue falling.
OPEC+ and its allies, including Russia, held a ministerial-level group meeting, but oil prices still plummeted. The group’s oil production policy remained unchanged, with Saudi Arabia indicating voluntary production cuts of 10.30 million barrels per day until the end of 2023, and Russia maintaining voluntary export restrictions of 300,000 barrels per day until the end of 2023.
Despite OPEC+ nations aiming to maintain supply tightness, traders chose to take profits as concerns over a global economic slowdown resurfaced.
On the technical front, oil prices continued their weak bearish trend, with fluctuations and breakdowns. During the Asian and European sessions, there was a minor rebound but it faced resistance at the $84.90 level, followed by a drop below the $83 level during the afternoon.
The prices further stabilized near $82.30 before a second failed rebound at the $84.60 level. The day ended with oil prices closing near the $82 level, marking the day’s lowest point.
Today’s crude oil trading strategy suggests a focus on short positions during rebounds and considering long positions on pullbacks.
- Key resistance levels to monitor in the short term are around 85-85.6.
- Key support levels to monitor in the short term are around 81.6-82.0.
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