Market Recap
On Thursday, spot gold fell toward $3,640 per ounce as profit-taking set in and markets reassessed the Fed’s stance on further rate cuts. Crude oil slid to around $63.22 per barrel, pressured by lingering concerns about US economic momentum despite a dip in weekly jobless claims. While claims fell, both labor supply and demand are weakening, signaling a softening job market and leaving traders cautious about the broader economic outlook.
Gold
After setting a record high the previous day, gold prices pulled back on Thursday. Spot gold slipped 0.4% to $3,643.40 per ounce, while December US gold futures dropped 1.1% to $3,678.30. On Wednesday, spot prices briefly touched $3,707.40 before retreating sharply.
Peter Grant, VP and Senior Metals Strategist at Zaner Metals, noted: “Powell’s remarks about rate cuts as a risk management measure created confusion, which led to profit-taking. Still, I believe the long-term bullish case for gold remains intact. Yesterday’s record high followed by a pullback looks like a technical correction… Each new high strengthens the credibility of a $4,000 target.”
From a technical perspective, gold’s long-term uptrend remains intact, though short-term correction risks persist. The failure to decisively break above $3,707 despite two attempts, and the subsequent retreat to $3,645 after the Fed’s decision, suggest a consolidation phase in the near term.
Gold Technical Outlook:
- Strategy: Focus on buying dips, with selective short-term sells on rebounds
- Resistance: $3,655–$3,665
- Support: $3,620–$3,610
Oil
The Fed’s 25-basis-point cut on Wednesday, combined with a pledge to steadily lower borrowing costs for the rest of the year, underscored its response to labor market weakness. Jorge Montepeque, Managing Director at Onyx Capital Group, commented: “The Fed is acting now because the economy is slowing, and it’s trying to restore growth.”
US weekly jobless claims fell, reversing the prior week’s sharp rise, but a softer labor market trend continues. Oversupply in the US, the world’s largest oil consumer, and weak fuel demand kept oil under pressure.
EIA data showed US crude inventories fell sharply last week, with net imports at record lows and exports near two-year highs. However, distillate inventories rose by 4 million barrels versus expectations of just 1 million, raising concerns about weak demand and weighing on prices.
Technically, oil remains in a medium-term sideways pattern. On the daily chart, candles have clustered in a narrow base with repeated moves through key moving averages. Short-term action (1H chart) reflects choppy pullbacks from recent highs, with MACD momentum turning bearish. This suggests further downside room before oil regains upward momentum.
Oil Technical Outlook:
- Strategy: Focus on buying dips, with selective short-term sells on rebounds
- Resistance: $65.0–$66.0
- Support: $62.5–$61.5
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