Due to lingering inflation concerns, the market worries about another interest rate hike by the U.S. Federal Reserve. The U.S. dollar strengthened yesterday, and bond yields were under pressure.  

However, gold showed minimal volatility and experienced a slight rebound. Investors digested the news that OPEC+ and Russia decided to extend supply restrictions until the end of this year, leading to a minor decline in oil prices from their near one-year highs. 

Gold >> 

Gold experienced a slight rebound yesterday with minimal volatility. The strength of the U.S. dollar and pressure on bond yields raised concerns due to signs of persistent inflation.  

Initial jobless data from the U.S. also indicated the economy’s resilience, weakening the demand for gold as more people bet on the avoidance of a U.S. economic recession this year.  

However, U.S. interest rates remain a key focal point in the gold market, with the Federal Reserve set to make a series of speeches before announcing its rate decision later this month. 

On the technical side, gold traded in a narrow range around $1,915 during the day. It saw some minor rebounds in the Asian and European sessions, briefly rising above $1,915.  

In the late U.S. session, influenced by bearish news on initial jobless claims, gold quickly fell but stabilized around the $1,916 mark, eventually closing with modest fluctuations around the $1,923 level. 

Technical Analysis: 

Today’s short-term trading strategy for gold suggests focusing on short positions on rebounds, with long positions considered on pullbacks. 

• Key resistance levels to watch in the short term are around 1930-1936. 

• Key support levels to watch in the short term are around 1900-1907. 

WTI Crude Oil >> 

Yesterday, oil prices experienced a slight dip, retracting from their nearly one-year highs. The pressure on oil prices was attributed to a stronger US dollar and expectations of weak international crude oil demand.  

Investors were digesting the news of OPEC+ and Russia’s decision to extend supply restrictions until the end of the year. Looking at the strength-to-weakness index, crude oil still signals overbought conditions, increasing the risk of a pullback. 

The Organization of the Petroleum Exporting Countries (OPEC) and its allies had implemented production cuts across the group, followed by additional voluntary cuts, resulting in a significant rise in oil prices this quarter. Goldman Sachs noted that OPEC+’s actions have added bullish risk to their price outlook. 

Oil prices exhibited volatile trading yesterday, experiencing a minor breach of support levels amidst fluctuations.  

During the Asia-Europe trading session, prices faced pressure and made a modest retreat from the $87 per barrel threshold. In the afternoon European session, they stabilized around $86.8 per barrel after a brief dip.  

In the late US trading session, prices accelerated higher, surpassing the $87.6 per barrel mark before entering a sideways trend.  

Ultimately, after reaching a high and retracing post-EIA data release, prices dipped below the European session low of $86.8 per barrel and continued to fluctuate around $86.4 per barrel before closing. 

Technical Analysis: 

Short-term crude oil trading strategy for today suggests a primary focus on buying during pullbacks and using rallies for short-selling opportunities. 

• Key resistance levels to monitor in the short term are around 87.8-88.3. 
• Key support levels to monitor in the short term are around 85-85.5. 

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