The tension in the Middle East stimulates safe-haven demand, pushing gold prices up by over 1%, reaching a near two-month high during the session.  

Strong crude oil demand significantly boosts the oil market, with OPEC reaffirming its responsibility for the global oil market. Oil prices rise by over 1%, setting a two-week high, and Brent crude consecutively breaks through the $90 and $91 price points. 

Gold >> 

Due to the escalation of the Israeli-Palestinian conflict, safe-haven demand drove gold prices significantly higher on Wednesday, reaching as high as $1,960 per ounce, close to a two-month high. Spot gold closed up by 1.28% or $24.53 per ounce, at $1,947.55 per ounce. December gold futures gained 1.68%, closing at $1,968.30 per ounce. 

An explosion at a hospital in Gaza and the cancellation of meetings between Egyptian and Palestinian leaders with U.S. President Biden after the attack raised concerns in the market. The increased demand for traditional safe-haven assets significantly boosted gold prices over the past week. This week, the market is focusing on a series of U.S. economic indicators and Federal Reserve officials, especially Chairman Powell’s speech scheduled for Thursday. 

Gold displayed a strong daily bullish candlestick, transitioning with small bearish and bullish moves on Monday and Tuesday for consolidation. After this consolidation phase, gold showed a clear upward trend on Wednesday. Moving averages remained in a golden cross configuration, and the short-term hourly chart has established a new bullish trend recently. 

Technical Analysis: 

Today’s short-term strategy for gold suggests focusing on buying the dips as the primary approach, with shorting on price rebounds as a secondary strategy. 

• Key resistance levels to watch in the short term are around 1965-1970. 
• Key support levels to watch in the short term are around 1935-1940. 

WTI Crude Oil >> 

On Wednesday, the tense situation in the Middle East drew attention, particularly during Biden’s visit to Israel. Strong demand for oil has created a bullish trend in the oil market, but OPEC’s measured approach and political distancing actions stabilized oil prices.  

Crude oil prices reached a two-week high, with crude oil futures up by $1.66 per barrel, a 1.92% increase, closing at $88.32 per barrel. Brent crude oil futures rose by $1.60, marking a 1.8% increase and closing at $91.50 per barrel. 

Analysts suggest that oil prices remain volatile as energy traders closely watch whether the U.S. can successfully prevent an escalation of the Israel-Palestine conflict. Furthermore, the primary driver of this year’s oil price increase has been OPEC’s deliberate production cuts, rather than an exceptionally robust demand leading to oil supply shortages.  

Looking at global economic growth in the fourth quarter and the next year, it is highly probable that the developed economies of Europe and the United States, affected by higher interest rates, will continue to experience a slowdown.  

International organizations such as the EIA and IEA have downgraded their expectations for oil demand growth. However, the Israel-Palestine conflict is unlikely to trigger a repeat of the 20th-century oil embargo event, and oil prices are expected to experience upward surges followed by corrections. 

Crude oil consolidated sideways yesterday, building up momentum and remaining above its lows. Currently, it is consolidating and gathering strength, with a low point likely to form around $81.50 in the short term. Once stability is established, there’s potential for an upward breakout. 

Technical Analysis: 

Today’s crude oil trading strategy suggests a primary focus on buying on dips and a secondary consideration for selling on rebounds. 

• Key resistance levels to monitor in the short term are around 89.0-89.5. 
• Key support levels to monitor in the short term are around 86.0-86.5. 

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