Gold prices surged to a two-month high, benefiting from a weaker U.S. dollar. The U.S. reported lower-than-expected initial jobless claims, indicating a tight labor market, which led to a slight pullback in gold from its peak levels.  

On the other hand, oil prices edged higher, supported by a decline in U.S. crude inventories and robust Chinese crude imports. However, investors remained cautious due to concerns over weak demand prospects. 

Gold>>

On Thursday’s U.S. market, gold prices were trading around $1970 per ounce, reaching a new high since May 17^th at $1987 per ounce during the day.  

The surge was driven by a weaker U.S. dollar as inflation pressures in the U.S. appear to be easing, and expectations are growing for a gradual economic slowdown, leading the market to bet that the Federal Reserve may soon end its rate hike cycle. 

On the same day, the U.S. released unexpected initial jobless claims data, showing a decline. However, manufacturing activity in the Philadelphia region continued to contract for the 11th consecutive month, even worse than anticipated. Following the data release, spot gold experienced short-term volatility.  

Seasonally adjusted initial jobless claims for the week ending July 15^th decreased by 9,000 to 228,000, lower than the market’s expectation of 242,000, marking the lowest level since May.  

While the labor market remains tight, the decline last week might be magnified by difficulties in adjusting data based on seasonal patterns.  

Gold prices briefly rose to a two-month high on Thursday, supported by the weakening U.S. dollar, and the market’s growing anticipation that the Federal Reserve will conclude its aggressive rate hike cycle at the upcoming policy meeting next week. 

Technical Analysis: 

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

• Key resistance levels to watch on the upside are between 1984 and 1990. 
• Key support levels to watch on the downside are between 1955 and 1960. 

WTI Crude Oil >>

On Thursday, during the U.S. trading session, WTI crude oil saw a slight increase and was trading near $75.60 per barrel. The U.S. Energy Information Administration (EIA) reported on Wednesday that U.S. crude oil inventories declined last week, attributed to increased crude oil exports and higher refinery capacity utilization.  

The recent sales of crude oil from the Strategic Petroleum Reserve (SPR) in the last week of June contributed to tightening global crude oil supply.  

According to the EIA, in the week ending July 14^th, crude inventories at the Cushing, Oklahoma key delivery hub decreased by 2.9 million barrels, and U.S. net crude oil exports increased by 1.67 million barrels per day, reaching 3.81 million barrels per day.  

Crude oil inventories decreased by 708,000 barrels last week, totaling 457.4 million barrels, falling short of the analysts’ expectations of a 2.4-million-barrel decline. 

The rebound in the U.S. dollar and the smaller-than-expected decline in U.S. crude oil inventories last week limited the upward momentum of oil prices.  

As a result, oil prices may fluctuate around $75 per barrel, with a bias toward the upside, but short-term gains could be restricted. Investors are also keeping an eye on the G20 Energy Ministers’ meeting for potential impact on the oil market.  

Yesterday, crude oil experienced a high followed by a retreat, with the daily candle forming a small bearish doji, indicating some resistance after the upward movement. 

Technical Analysis: 

Today’s short-term trading strategy suggests focusing on buying on dips as the primary approach, with selling on rebounds as a secondary strategy.  

• Key resistance levels to watch in the short term are around 76.6 to 77.0. 

• Key support levels to monitor in the short term are around 74.0 to 74.6. 

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