Search Mark
Home / Market Insight

Powell’s Remarks Boost Gold; Oil Falls as Hurricane Impact Eases


Powell's Remarks Boost Gold; Oil Falls as Hurricane Impact Eases

Gold

On Tuesday, despite a stronger dollar and rising US Treasury yields, Fed Chair Jerome Powell’s comments to Congress stating that the US economy is “no longer overheating” and signaling a potential rate cut in September supported gold prices.

Spot gold stabilized with a dip to $2349.45 before rebounding and closing up 0.2% at $2363.82 per ounce. Investors are now focused on the US June inflation data, expected later this week, which could clarify the Fed’s rate path.

In his testimony, Powell acknowledged that inflation remains above the Fed’s 2% target but has shown improvement in recent months, suggesting that more positive data could justify a rate cut. He is set to give his semi-annual monetary policy testimony to the House Financial Services Committee today. Additionally, investors should keep an eye on geopolitical developments.

Gold Technical Analysis:

Yesterday, gold traded within a range of $2350-$2370. During the Asian and European sessions, prices briefly rebounded to $2368 before falling.

In the afternoon, gold tested the $2360 level, dropping to $2356 before stabilizing and rebounding. The US session saw an acceleration past $2371, followed by a pullback, with prices settling around $2350 by the close.

Today’s Focus:

  • Short-term strategy: Favor shorting on rebounds and buying on pullbacks.
  • Resistance: $2375-$2380
  • Support: $2350-$2345

Oil

On Tuesday, oil prices fell over 1% and marked a third consecutive daily decline as traders learned that Hurricane Beryl was unlikely to cause long-term supply disruptions. Damage to a key oil production center in Texas was less severe than feared.

WTI crude closed down 0.57% at $81.74 per barrel, while Brent crude closed down 0.79% at $84.95 per barrel.

Several offshore production facilities were evacuated, ports were closed, and refining slowed. However, as Beryl weakened to a tropical storm, the impact on major Gulf Coast refineries appeared minimal.

Despite Powell’s indication of a potential rate cut, his comments led to a further decline in oil prices due to concerns that a weakening economy might hinder oil demand. Today’s focus will be on the EIA crude inventory data and geopolitical developments.

Oil Technical Analysis:

Yesterday, oil prices showed a pattern of rebound and resistance, closing lower. During the Asian and European sessions, prices fell below the $82 level, consolidating around $81.6. The US session saw a brief rebound to $81.7 before a quick recovery to $82.5, followed by a decline and lower close.

Today’s Focus:

  • Short-term strategy: Favor buying on pullbacks and shorting on rebounds.
  • Resistance: $82.5-$83.0
  • Support: $80.5-$80.0

Risk Disclosure
Trading in financial instruments involves high risks due to the fluctuation in the value and prices of the underlying financial instruments. Due to the adverse and unpredictable market movements, large losses exceeding the investor’s initial investment could incur within a short period of time. The past performance of a financial instrument is not an indication of its future performance. Investments in certain services should be made on margin or leverage, where relatively small movements in trading prices may have a disproportionately large impact on the client’s investment and the client should therefore be prepared to suffer significant losses when using such trading facilities.

Please ensure you read and fully understand the trading risks of the respective financial instrument before engaging in any transaction with Doo Prime’s trading platforms. You should seek independent professional advice if you do not understand any of the risks disclosed by us herein or any risk associated with the trade and investment of financial instruments. Please refer to Doo Prime’s Client Agreement and Risk Disclosure Statement to learn more.

Disclaimer      
This information is addressed to the general public solely for information purposes and should not be taken as investment advice, recommendation, offer, or solicitation to buy or sell any financial instrument. The information displayed herein has been prepared without any reference or consideration to any particular recipient’s investment objectives or financial situation. Any references to the past performance of a financial instrument, index, or a packaged investment product shall not be taken as a reliable indicator of its future performance. Doo Prime and its holding company, affiliates, subsidiaries, associated companies, partners and their respective employees, make no representation or warranties to the information displayed and shall not be liable for any direct, indirect, special or consequential loss or damages incurred a result of any inaccuracies or incompleteness of the information provided, and any direct or indirect trading risks, profit, or loss arising from any individual’s or client’s investment.

Share to

Market Insight

Gold Rises on Rate Cut Hopes, Oil Prices Retreat

Gold prices surged to a near two-month high as Fed Powell's dovish comments boosted rate cut expectations. Meanwhile, oil prices fell due to demand concerns

2024-7-16 | Market Insight

Gold Faces Resistance, Oil Rebounds Ahead of US CPI Data

Gold surged before pulling back as Powell hinted at potential rate cuts, while oil rebounded from a two-week low amid strong US refining activity

2024-7-11 | Market Insight

Powell's Remarks Boost Gold; Oil Falls as Hurricane Impact Eases

Fed Powell hints at a possible rate cut, boosting gold despite a stronger dollar and rising Treasury yields. Meanwhile, oil decline for the third straight day

2024-7-10 | Market Insight