Despite the overall strength of the US dollar, gold prices rose by 0.7% to close above USD 2030 per ounce due to a decrease in US bond yields and escalating tensions in the Middle East.  

Concerns over weak international economic demand prompted traders to reassess the supply risk premium resulting from the escalation of tensions in the Middle East, leading to a drop in oil prices by over USD 1 per barrel. 

Gold >>  

On Monday, despite the overall strength of the US dollar, spot gold closed up by 0.71%, reaching USD 2032.88 per ounce, due to a decrease in US bond yields and escalating tensions in the Middle East. COMEX February gold futures settlement price rose by 0.4%, closing at USD 2025.4 per ounce. 

With relatively few US economic data releases on Monday, changes in positioning ahead of the Federal Reserve interest rate decision and geopolitical developments influenced the trend in gold prices. The escalation of geopolitical tensions provided some support for gold prices.  

However, the likelihood of the Federal Reserve adopting a more aggressive easing policy in 2024 may continue to drive the US dollar and limit the upside potential for gold prices. Technically, gold experienced initial gains followed by declines.  

During the Asian session, influenced by weekend news, it opened slightly higher, breaking through the USD 2028 level, then stabilizing after a second retracement to around USD 2019, and rebounding.  

In the afternoon, it accelerated further, breaking through the USD 2033 level, before facing resistance and retracing into a volatile trading range.  

During the late US session, it surged again, breaking through the USD 2037 level, before experiencing roller-coaster-like declines to near the Asian session’s starting point around USD 2020, ending the session with oscillating closing prices. 

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 2042-2050. 
• Key support levels to watch in the short term are around 2010-2016. 

WTI Crude Oil >> 

On Monday, concerns about weak global economic conditions led to worries about demand, prompting traders to reassess the supply risk premium resulting from the escalation of tensions in the Middle East. 

WTI March crude oil futures fell by USD 1.23 per barrel, a decrease of 1.58%, closing at USD 76.78 per barrel, while Brent crude oil futures fell by USD 1.15 per barrel, a decrease of 1.4%, closing at USD 82.40 per barrel. 

According to traders and LSEG ship-tracking data, a fire at refineries in the Baltic and Black Seas led to operational interruptions, possibly causing Russia to reduce its export volume of naphtha by about 127,500 to 136,000 barrels per day, roughly one-third of its total export volume.  

The main ministers of the Organization of the Petroleum Exporting Countries (OPEC) and OPEC+ will hold an online meeting on February 1st.  

Sources within OPEC+ mentioned that decisions regarding production levels for April and beyond might be made in the coming weeks since the timing of this meeting is too early to decide on further production policies. 

On the technical side, oil prices experienced volatile trading, with a high and low oscillation before closing below the bottom. During the Asian session, influenced by weekend developments, prices quickly opened higher, breaking through the USD 79.3 level before retracing and oscillating lower.  

In the afternoon, prices further declined, breaking through the USD 78 level to reach around USD 77.6 before oscillating.  

During the late US session, there was a second attempt to rebound, facing resistance near the USD 78.3 level before declining again, breaking through the USD 77 level to reach around USD 76.5, ending with weak closing prices. 

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 78.4-79.0. 
• Key support levels to monitor in the short term are around 75.0-75.7. 

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