The expectation of a March interest rate cut by the Federal Reserve has cooled, causing gold prices to plummet by nearly 30 US dollars. Attention is now focused on U.S. economic data.
Oil prices are under pressure due to the U.S. dollar rising to its highest level in a month, leading to a shift from gains to losses.
On Tuesday, spot gold closed down 1.28%, settling at USD 028.26 per ounce, with an intraday low of USD 2024.16 per ounce. This marked a drop of about USD 30 from Monday’s closing price. Gold futures also declined by 1.04%, closing at USD 2030.2 per ounce.
As investors reconsidered the timing of a potential interest rate cut by the Federal Reserve, precious metal prices collectively declined. Gold faced selling pressure after failing to rise above the weekly high of USD 2060 per ounce.
The rise in U.S. bond yields contributed to this trend, with the 2-year yield at 4.20%, the 5-year yield at 3.90%, and the 10-year yield at 4%. The higher yields drew attention to the U.S. dollar, putting pressure on gold priced in dollars.
On the technical side, gold faced resistance at the USD 2055 level, experiencing a unilateral downturn. During the Asian-European sessions, gold prices oscillated weakly below USD 2055, accelerating their decline in the afternoon European session, breaking below the previous day’s low of USD 2047.
The price continued to drop during the late U.S. session, reaching near USD 2031, followed by a rapid rebound.
However, in the final hours of the U.S. session, gold faced renewed downward pressure, breaking below USD 2045, and during the early morning hours, the price continued its very weak bearish trend, falling below USD 2030 and reaching around USD 2024 before closing weakly.
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 2040-2045.
- Key support levels to watch in the short term are around 2020-2015.
WTI Crude Oil >>
U.S. crude oil fell by USD 0.28 per barrel, or 0.39%, closing at USD 72.40 per barrel compared to Friday. Due to concerns about the situation in the Middle East, U.S. oil briefly rose over 1% to USD 73.54 per barrel during the session but later turned lower, primarily due to the strengthening U.S. dollar.
Brent crude oil increased by USD 0.14 per barrel, or 0.2%, closing at USD 78.29 per barrel, rising USD 1 per barrel during the session.
Oil prices were under pressure due to the U.S. dollar reaching its highest point in a month, but concerns about the impact on energy supplies from the escalating tension in the Middle East supported oil prices.
Record production in the United States and increased output from some members of the Organization of the Petroleum Exporting Countries (OPEC) also indicated that the tightness in the oil market at the beginning of 2024 might be lower than initially expected.
On the technical side, oil prices faced resistance and experienced a pullback during volatile trading. During the Asian-European sessions, prices slightly increased, hovering around the USD 72.1 level.
In the afternoon, there was a further acceleration in the upside momentum, breaking through the USD 73 level and continuing the rebound.
However, during the late U.S. session, there was a rapid climb above USD 73.5, followed by a retracement and oscillation on the downside. In the early morning hours, there was a second attempt to rebound, but prices faced resistance around the USD 73 level, resulting in a weak downward break and closing.
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 73.0-74.0.
- Key support levels to monitor in the short term are around 71.0-70.0.
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