The U.S. Producer Price Index (PPI) for February came in higher than expected, indicating that inflation in the United States is still on the rise. Stubborn inflation increases the pressure on the Federal Reserve to lower high interest rates, putting pressure on non-interest-bearing assets such as gold.  

Unexpectedly, U.S. crude oil inventories declined, indicating increased demand, while an attack on Russian refineries could disrupt crude oil supplies, both of which support oil prices.  

Gold >>  

On Thursday, the U.S. February PPI further dampened hopes of an early rate cut by the Federal Reserve, pushing up U.S. Treasury yields and the dollar, thereby pressuring gold prices. Spot gold fell by 0.6% to USD 2161.10 per ounce, while gold futures closed at USD 2166.60 per ounce, down by approximately 0.7%. 

The U.S. February PPI data was released, showing a year-on-year increase of 1.6%, higher than the expected 1.2%, and a month-on-month increase of 0.6%, surpassing the expected 0.30% and the previous value of 0.30%.  

Both figures significantly exceeded expectations, reflecting persistent inflation. Additionally, according to data released by the U.S. Department of Commerce, U.S. retail sales in February grew less than expected, highlighting concerns about the sustainability of consumer spending after a sharp decline in the early first quarter.  

Initial jobless claims in the U.S. last week stood at 209,000, still at historically low levels. The strong labor market and persistent inflation will be cited by the Federal Reserve as reasons to maintain interest rates unchanged for the fifth consecutive week next week. 

Yesterday, gold technically weakened below the 2176 level, oscillating downwards under pressure. During the Asian-European session, it repeatedly fell from the high point of 2176, further dropping below the 2170 level to around 2167 and entering a sideways oscillation.  

In the afternoon, after the release of the PPI and initial jobless claims data during the U.S. session, gold quickly tested the bottom and rebounded to suppress around the 2170 level, ending the day with weak downward pressure. 

Technical Analysis: 

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 2172-2177. 
• Key support levels to watch in the short term are around 2150-2145.  

WTI Crude Oil >> 

On Thursday, oil prices surged to a four-month high as the International Energy Agency (IEA) predicted a tighter market in 2024 and raised its outlook for oil demand growth this year.  

WTI crude oil rose by USD 1.54, or 1.9%, to USD 81.26 per barrel, while Brent crude rose by USD 1.39, or approximately 1.7%, to USD 85.42 per barrel, marking the highest closing price since November 6th. 

The IEA stated that the easing of post-pandemic turmoil and the gloomy economic outlook would dampen demand growth this year, even though disruptions in shipping would provide short-term boosts.  

The IEA estimates that oil demand will increase by 1.3 million barrels per day (bpd) this year, a decrease of 1 million bpd from 2023, but an increase of 110,000 bpd from last month’s estimate due to ships taking longer routes following the Red Sea attacks.  

The IEA also lowered its supply forecast for 2024, expecting oil supply to increase by 800,000 bpd to reach 102.9 million bpd. Additionally, Ukraine launched drone attacks on Russian oil facilities for the second consecutive day, resulting in a fire at Russia’s largest refinery, one of the most serious attacks on Russia’s energy sector in recent months. 

Yesterday, oil prices surged supported by strong bullish momentum, breaking through the USD 79.5 level and closing higher. During the Asian-European session, prices oscillated around the USD 79.5 level, maintaining strong momentum.  

In the afternoon, prices quickly rose above the USD 80 mark and continued to strengthen. In the U.S. session, prices accelerated higher, breaking through the USD 81 level and continuing the strong bullish trend, ultimately reaching a recent rebound high of USD 81.6 and closing strongly. 

Technical Analysis: 

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 82.0-82.5. 
• Key support levels to monitor in the short term are around 80.0-79.5. 

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