The U.S. dollar’s rise to a near six-month high, coupled with a more dovish stance from Federal Reserve officials, led to a decline in gold prices, hitting a new low for over a week.  

This week, the market’s attention is on the ISM Non-Manufacturing PMI. Positive economic data, along with expectations of continued supply cuts from major oil-producing countries, propelled U.S. crude oil to its highest level in 10 months, while Brent crude oil breached the $90 per barrel mark for the first time in ten months.

Gold >> 

On Tuesday, the U.S. Dollar Index rose to a five-month high, marking its seventh consecutive weekly gain, achieving its longest winning streak since 2018. Meanwhile, the price of gold declined, falling below $1930 per ounce, trading at around $1925 per ounce during the U.S. market session. 

The short-term drop in the U.S. Dollar Index followed comments from the typically hawkish Federal Reserve Board member Waller, who indicated that there was no immediate urgency for additional interest rate hikes. 

Waller mentioned that given recent data showing a continued slowdown in inflation, policymakers had room to proceed with interest rate hikes ‘cautiously.’ Waller’s remarks caused a spike in gold prices. 

At the close of the U.S. market session, spot gold was reported at $1924.96 per ounce, down $13.21 per ounce or 0.68%. It had reached a daily high of $1938.97 per ounce and a low of $1924.96 per ounce, marking a near one-week low.  

October gold futures closed down 0.07% at $1947.00 per ounce, while December gold futures closed down 0.06% at $1965.90 per ounce. 

Market attention is now focused on the release of the August ISM Non-Manufacturing Purchasing Managers’ Index (PMI) this Wednesday. The market consensus is an expectation of 52.5. If the data falls short of expectations, it could put pressure on the U.S. dollar and support gold prices. 

Technical Analysis: 

The suggested trading strategy for gold today is to primarily consider short positions on rebounds, with long positions on pullbacks as a secondary approach. 

• Key resistance levels to watch in the short term are around 1935-1938. 
• Key support levels to watch in the short term are around 1913-1915. 

WTI Crude Oil >> 

On Tuesday, crude oil saw a slight increase in prices, trading at $87.5 per barrel, driven by positive economic data from both China and the United States, as well as expectations of continued oil supply cuts by major oil-producing nations. 

China’s Caixin Manufacturing PMI survey data for August unexpectedly showed an expansion in manufacturing activity, boosting market optimism about the economic health of the world’s largest oil importer, China.  

Both Saudi Arabia and Russia extended their voluntary production cut plans until the end of this year, raising concerns among investors about potential energy shortages during the winter demand peak.  

As a result, U.S. crude oil futures reached their highest levels in 10 months, and Brent crude oil futures settled above $90 per barrel for the first time since November 16, 2022. 

As of Tuesday’s closing, WTI crude oil futures for October gained $1.14, or 1.33%, closing at $86.69 per barrel. Brent crude oil futures for November rose $1.04, or 1.17%, settling at $90.04 per barrel. 

Technical Analysis: 

The short-term trading strategy for crude oil today suggests a primary focus on taking long positions on pullbacks and considering short positions on high rebounds as a secondary approach. 

• Key resistance levels to monitor in the short term are around 88.0-88.6. 
• Key support levels to monitor in the short term are around 84.0-84.5. 

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