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U.S. Dollar Up for Seventh Straight Week as Gold Hits One-Week Low, Oil Rises Over 1%


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. 

Forward-looking Statements    
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Doo Prime has provided these forward-looking statements based on all current information available to Doo Prime and Doo Prime’s current expectations, assumptions, estimates, and projections. While Doo Prime believes these expectations, assumptions, estimations, and projections are reasonable, these forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond Doo Prime’s control. Such risks and uncertainties may cause results, performance, or achievements materially different from those expressed or implied by the forward-looking statements.     

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Disclaimer    

While every effort has been made to ensure the accuracy of the information in this document, DOO Prime does not warrant or guarantee the accuracy, completeness or reliability of this information. DOO Prime does not accept responsibility for any losses or damages arising directly or indirectly, from the use of this document. The material contained in this document is provided solely for general information and educational purposes and is not and should not be construed as, an offer to buy or sell, or as a solicitation of an offer to buy or sell, securities, futures, options, bonds or any other relevant financial instruments or investments. Nothing in this document should be taken as making any recommendations or providing any investment or other advice with respect to the purchase, sale or other disposition of financial instruments, any related products or any other products, securities or investments. Trading involves risk and you are advised to exercise caution in relation to the report. Before making any investment decision, prospective investors should seek advice from their own financial advisers, take into account their individual financial needs and circumstances and carefully consider the risks associated with such investment decision. 

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