Gold
On Tuesday, the USD index rose to its highest level in over six months, pushing U.S. Treasury yields higher and pressuring gold prices, which dipped to $2,589.61 before closing at $2,598.41 per ounce, a nearly two-month low.
The USD gained 0.51%, reaching 105.96, with brief surges above 106, driven by expectations that Trump’s victory may lead to higher tariffs, reducing the Fed’s room for rate cuts and boosting the dollar. U.S. Treasury yields also rose in response.
Vassili Serebriakov, a forex strategist at UBS in New York, noted, “The dollar’s volatility began even before the election, and the likelihood of a Republican sweep in Congress is widely seen as a dollar-positive.”
On Tuesday, Minneapolis Fed President Neel Kashkari suggested that unexpected inflation spikes by December could prompt the Fed to reassess rate cuts. Richmond Fed President Thomas Barkin added that the Fed is prepared to respond as needed, considering the healthy state of the U.S. economy.
Today, investors will focus on U.S. October CPI data and comments from 2025 FOMC voting members, including Kansas City Fed President Schmid, along with post-election market reactions.
Gold Technical Analysis:
Gold extended its decline, breaking through the $2,600 mark with strong bearish momentum. Daily candlesticks show consecutive large drops, opening space below the lower Bollinger band. Short-term moving averages remain in a death cross, indicating continued downward pressure.
Today’s Focus:
- Resistance: $2,617-$2,622
- Support: $2,585-$2,580
Oil
On Tuesday, oil prices rose slightly after initially surging, as OPEC lowered its global demand growth forecast for the fourth consecutive month. WTI crude closed up $0.08 (0.12%) at $68.12 per barrel, with a high of over 1.6% during early U.S. trading. Brent crude for January delivery closed up $0.06 (0.08%) at $71.89 per barrel, reaching an intraday high of nearly 1.4%.
In its latest monthly report, OPEC reduced its oil demand growth forecast for 2024 to 1.8 million barrels per day, slightly under 2%, due to weaker-than-expected demand in Asia and Africa.
Trump’s election win adds uncertainty for oil markets, as he is expected to increase sanctions on Iran, a key OPEC member. Reduced Iranian supply could support prices if demand holds steady, but Trump’s tariff policies may dampen U.S. and global economic growth, potentially reducing oil demand in 2025.
Energy analyst Tsvetana Paraskova pointed out that OPEC+ may need to adjust production policies more frequently if Trump’s presidency heightens global supply and demand uncertainties.
Meanwhile, a stronger USD also pressured oil, making it more expensive for non-U.S. countries.
Today, investors will watch the U.S. weekly API crude inventory data, Fed officials’ speeches, and geopolitical developments.
Oil Technical Analysis:
WTI oil saw resistance at $69.1, followed by a decline to $67.7, closing with a bearish candlestick below key moving averages. This pattern suggests a continuation of the downward trend, though recent sharp declines may limit further downside in the short term.
Today’s Focus:
- Resistance: $69.3-$69.8
- Support: $67.0-$66.5
