On January 1st, New Year’s Day, the market is closed for a day. Gold has shown strong momentum in 2023, with a gain of over 15% from the beginning of the year, hitting historical highs twice. The market anticipates that gold prices will continue to rise in 2024.
Due to geopolitical tensions, reduced oil production, and global measures to control inflation, the crude oil market is experiencing thin trading. After two consecutive years of gains, international crude oil saw a decline of over 10% in 2023.
Last Friday, spot gold briefly dipped below USD 2060 per ounce, reaching a high of USD 2088.43 per ounce before closing at USD 2062.85 per ounce, ending with a 0.11% decline.
The shift to a dovish stance in U.S. interest rates, ongoing geopolitical risks, and central banks’ purchasing behaviors are expected to support the gold market amid the volatile conditions in 2023.
According to the CME FedWatch tool, investors are betting with an 88% probability on a rate cut by the Federal Reserve in March. This week is a crucial one for gold, with the monthly release of non-farm payroll data.
Following the unexpected strong performance in 2023, analysts predict further gold price increases in 2024, driven by three key factors: hedge funds chasing momentum, central banks consistently purchasing physical gold, and a resurgence of Exchange-Traded Fund (ETF) investors.
On the technical side, gold faced pressure around the USD 2074 level, experiencing a weak oscillation and downward adjustment.
During the Asian and European sessions, it rebounded slightly around the USD 2067 level, accelerated in the afternoon, breaking through the USD 2074 resistance, but ultimately faced downward pressure, oscillating below the USD 2067 level.
In the U.S. session, a second rebound faced further resistance around the USD 2069 level, concluding with a weak closing.
Today’s short-term strategy for gold suggests prioritizing short positions during rebounds, with long positions considered as a secondary approach during pullbacks.
- Key resistance levels to watch in the short term are around 2080-2086.
- Key support levels to watch in the short term are around 2050-2056.
WTI Crude Oil >>
On the last trading day of December 29th, the international crude oil futures market experienced relatively thin trading. Influenced by geopolitical tensions, oil production cuts, and global measures to control inflation, crude oil prices exhibited significant volatility.
After two consecutive years of gains, international crude oil futures saw a slight decline this week, accumulating an annual drop of over 10%.
The February contract price for U.S. crude oil futures fell by 0.17%, contributing to a cumulative decrease of approximately 10.7% for the entire year of 2023. Similarly, Brent crude oil prices dropped by 0.22%, accumulating a yearly decline of around 10.3%.
In terms of market news, some shipping companies announced the resumption of shipping through the Red Sea, easing concerns about supply and causing a sharp drop in oil prices on Thursday.
Previously, Houthi rebels in Yemen had attacked ships, leading major companies to suspend the use of the Red Sea route. However, some crude and refined product vessels chose longer routes around Africa to avoid potential conflicts in the region.
On the 30th, Houthi rebels attacked commercial ships again, and Iranian warships subsequently entered the Red Sea, escalating tensions, with the possibility of significant oil price fluctuations.
From a technical perspective, oil prices remain weakly consolidated below 72.6, showing a weak oscillation pattern.
The daily candle closed with a small bearish adjustment after oscillating, presenting a series of three consecutive trading days at the daily level with a neutral closing in a oscillating adjustment phase.
Today’s crude oil trading strategy suggests prioritizing short positions during rebounds, with long positions considered as a secondary approach during pullbacks.
- Key resistance levels to monitor in the short term are around 73.6-74.0.
- Key support levels to monitor in the short term are around 70.0-71.0.
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