On Wednesday, the U.S. Federal Reserve released the minutes of the December FOMC meeting, and Fed Chair Powell also gave a speech.  

The U.S. dollar rose, and gold prices recorded a fourth consecutive decline. With Libya shutting down oil fields and renewed tensions in the Red Sea, oil prices rebounded more than 3% from their lows. 

Gold >> 

On Wednesday, the market began to adopt a more cautious stance, speculating that the overbought conditions and optimism following the potential shift by the Federal Reserve could pave the way for a reversal at the beginning of the year.  

Spot gold sharply declined, closing down 0.85% at USD 2041.39 per ounce, with the lowest point reaching USD 2031.65 per ounce. Gold futures also fell 1.5%, settling at USD 2042.8 per ounce. 

In the pre-market U.S. session, Fed’s Powell made a statement, suggesting a higher likelihood of a soft landing for the U.S. economy.  

He reiterated the possibility of further policy tightening and emphasized that inflation is approaching the target range of 2%. Influenced by these remarks, the U.S. dollar maintained its strength, with the dollar index rising by 0.3% to 102.52. 

From a technical standpoint, gold experienced slight fluctuations in the Asian and European sessions before a pullback under pressure at the key level of 2065.  

During the European and North American sessions, gold exhibited a very weak downward trend, breaking through the integer levels of 2050 and 2040 successively.  

In the U.S. session, a weak rebound faced resistance around the 2048 level, leading to another decline and breaking through the weak support at 2030 before closing. 

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 2055-2060. 
• Key support levels to watch in the short term are around 2030-2025. 

WTI Crude Oil >> 

On Wednesday, both crude oil benchmarks recorded their first increase in five days, with international oil prices rising by over 3%. U.S. crude oil saw its largest percentage gain since mid-November, closing at USD 72.70 per barrel, up 3.3% or USD 2.32 per barrel.  

Brent crude closed at USD 78.25 per barrel, up 3.11% or USD 2.36 per barrel. The disruption in Libya’s top oil field heightened concerns about the possibility of escalating tensions in the Middle East disrupting global oil supplies.  

The Israeli-Palestinian conflict extended to Lebanon, with a Hamas leader being targeted in Beirut, and an escalation of hostilities in the Gaza Strip, contributing to the rise in oil prices.  

Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) stated that cooperation and dialogue within the broader OPEC+ alliance, even after Angola’s announcement of withdrawal last month, would continue. 

On the technical side, oil prices initially experienced a quick decline during the Asian and European sessions, breaking through the USD 70 level to reach around USD 69.2 before bottoming out and rebounding. In the late U.S. session, there was a strong upward movement, forming a deep V-shaped rebound.  

After 23:00, prices surged consecutively, breaking through and stabilizing above the USD 73 level, establishing a strong rebound trend and bringing the overall prices back into a wide-ranging oscillation zone between bulls and bears. 

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 74.0-75.0. 
• Key support levels to monitor in the short term are around 72.0-71.0. 

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