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Hawkish Fed Pressures Gold, Oil Rises Over 2%


Hawkish Fed Pressures Gold, Oil Rises Over 2%

Gold

On Monday, hawkish comments from Federal Reserve officials helped boost US Treasury yields, causing gold prices to fall by 0.6%.

Investors are awaiting more US data and speeches from Fed officials this week for further clues on monetary policy.

Spot gold saw a slight pullback, dipping near the $2310 level during the session and ultimately closing down 0.6% at $2318.58 per ounce.

Hawkish remarks from Fed officials dampened expectations for a rate cut in September, putting pressure on gold prices.

According to the CME FedWatch Tool, the probability of a rate cut in September dropped to 61.5% from 68.5% the previous day. Due to weaker-than-expected economic data, the 10-year Treasury yield rose by 6.2 basis points to 4.275% on Monday, after recording the largest single-day drop of the year last Friday.

Upcoming US data releases, including Tuesday’s retail sales (known as “scary data”), Thursday’s weekly jobless claims, and Friday’s preliminary PMI, are expected to provide more insight into consumer and economic strength.

Gold Technical Analysis:

Yesterday, gold experienced downward pressure in volatile trading. During the Asian and European sessions, prices faced resistance at the $2330 level, leading to a weak downward trend.

In the afternoon, gold fell further, breaking through the $2320 level to around $2315 before stabilizing and slightly rebounding.

In the evening US session, gold briefly surged past the $2327 level but faced resistance again, leading to a further decline and ultimately breaking below the $2310 level before stabilizing.

Hawkish Fed Pressures Gold, Oil Rises Over 2%

Today’s Focus:

  • Short-term strategy: Favor shorting on rebounds and buying on pullbacks.
  • Resistance: $2335-$2340
  • Support: $2305-$2300

Oil

On Monday, investor optimism about demand prospects drove US crude prices up by nearly $2, reaching the highest settlement price in over a month and continuing last week’s upward trend.

WTI crude approached the $80 mark but did not hold, ultimately closing up 2.39% at $79.91 per barrel. Brent crude closed up 2.15% at $83.97 per barrel.

Both WTI and Brent futures saw settlement prices rise by about 2%, with WTI reaching above $80 for the first time in a month.

Last week, both major benchmarks recorded their first weekly gain in four weeks. Reports from OPEC, OPEC+, the International Energy Agency (IEA), and the US Energy Information Administration (EIA) have bolstered confidence that oil demand will improve in the second half of this year, leading to reduced inventories.

OPEC+ has also reiterated its commitment to adjusting supply increases based on market conditions, which has helped support oil prices.

Oil Technical Analysis:

Yesterday, oil prices experienced strong bullish momentum around the $77.5 level. During the Asian and European sessions, prices dipped slightly to retest support at $77.5 before rebounding.

In the afternoon, oil prices briefly surged past the $78 level and entered a horizontal trading pattern.

In the evening US session, oil prices saw consecutive gains on the hourly chart, breaking through and holding above the $79 level and continuing upward to close strongly near the $80 level.

Hawkish Fed Pressures Gold, Oil Rises Over 2%

Today’s Focus:

  • Short-term strategy: Favor buying on pullbacks and shorting on rebounds.
  • Resistance: $81.5-$82.0
  • Support: $79.2-$78.7

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