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U.S. Dollar Weakens, Gold Prices Rise for Three Consecutive Days; Oil Prices Jump By 2%


On Tuesday, the U.S. Dollar Index fell to a two-month low as Federal Reserve officials signaled the end of the tightening cycle. Meanwhile, the British Pound reached a 15-month high following better-than-expected wage growth.  

This led to an increase in gold prices, while the U.S. Dollar and Treasury yields declined in anticipation of U.S. inflation data that could offer insights into the Federal Reserve’s interest rate path. 

Gold>>

On the other hand, oil prices surged approximately 2% due to the weaker U.S. dollar, hopes of increased demand from emerging markets, and supply cuts by major oil-exporting nations. 

Benefiting from the weakened U.S. Dollar, international gold prices rose to $1938.20 per ounce yesterday, reaching a new high since June 21st.  

Market analysts suggest that gold prices are supported by the weakness in the U.S. Dollar as the Federal Reserve hinted at nearing the end of the tightening cycle. 

The market is eagerly awaiting U.S. inflation data to provide further clues on the Federal Reserve’s interest rate path. Spot gold has seen continuous gains for the third consecutive trading day, with intraday highs touching $1938.5.  

The closing gains narrowed, but the price stabilized above the $1930 level, indicating a positive short-term upward trend for gold. 

Gold has rebounded after reaching $1980, finding support around the $1930 level after multiple adjustments. From a technical perspective, a head-and-shoulders bottom pattern is forming around the $1910 level, suggesting a high probability of further upward movement in the short term.  

The initial resistance is seen around the daily upper band at $1950, while the key support level is at the $1930 mark. Upside targets are set at $1950, while a downside break could lead to a target of $1910. 

Technical Analysis: 

Today’s short-term trading strategy for gold suggests a focus on short positions during rebounds, with long positions considered on pullbacks. 

  • Key resistance levels to watch in the short term are around 1945-1950. 
  • Key support levels to watch in the short term are around 1920-1925. 

WTI Crude Oil >> 

In early Asian trading today, WTI crude oil was trading near $74.80 per barrel. Yesterday, international oil prices rebounded strongly, surging over 2% and reaching a 10-week high.  

This was driven by factors such as the weakened U.S. Dollar, hopes for increased demand from developing countries, and further supply cuts by major oil exporters Saudi Arabia and Russia in August.  

Additionally, the EIA’s short-term energy outlook report revised down its forecast for U.S. crude oil production this year, while predicting an increase in demand. Market analysts anticipate that these factors could push oil prices towards $80 per barrel. 

Yesterday, international oil prices made slight gains, recovering from the previous session’s declines attributed to the weak U.S. Dollar. Crude oil experienced some consolidation after testing higher levels but faced resistance near the previous high of 74.0.  

The daily chart shows a small bearish candlestick, indicating a retreat and a consolidation phase within the range. Despite the appearance of strength, there is currently insufficient momentum for a breakthrough. 

Technical Analysis: 

For today’s short-term trading strategy, it is recommended to focus primarily on buying on dips and using rallies for short selling. 

  • Key resistance levels to monitor in the short term are around 75.8-76.3. 
  • Key support levels to watch in the short term are around 73.5-73. 

Forward-looking Statements    
This article contains “forward-looking statements” and may be identified by the use of forward-looking terminology such as “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “hope”, “intend”, “may”, “might”, “plan”, “potential”, “predict”, “should”, or “will”, or other variations thereon or comparable terminology. However, the absence of such terminology does not mean that a statement is not forward-looking. In particular, statements about the expectations, beliefs, plans, objectives, assumptions, future events, or future performance of Doo Prime will be generally assumed as forward-looking statements.     

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.     

Doo Prime does not provide any representation or warranty on the reliability, accuracy, or completeness of such statements. Doo Prime is not obliged to provide or release any updates or revisions to any forward-looking statements.    

 
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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