Gold Near Record High Amid Yield Decline; Oil Dips

2024-10-25 | Commodities , Daily Analysis , Daily Insight , Gold , Oil , Precious Metals

Gold Near Record High Amid Yield Decline; Oil Dips

Gold

On Thursday, as the US dollar and Treasury yields declined, safe-haven demand drove gold prices up by over 1% during intraday trading. However, resistance near the $2740 level held, and gold ultimately closed at $2735.77 per ounce, near its record high.

Both the dollar index and Treasury yields retreated on Thursday. The dollar index dipped by approximately 0.4%, breaking a three-day rise and stepping back from a three-month high, while Treasury yields also fell, with the 10-year yield declining by 4.2 basis points but remaining above 4%.

In economic data, the US Labor Department reported an unexpected drop in initial jobless claims last week, although continuing claims, a measure of hiring trends, increased by 28,000 to reach 1.897 million—its highest level since mid-November 2021.

“The labor market is softening but not collapsing,” stated Carl Weinberg, Chief Economist at High Frequency Economics. “The Fed’s aim is to support the economy and job market without sparking a recession, making gradual policy easing a plausible path.”

Additionally, heightened geopolitical tensions and uncertainty surrounding the US election have sustained gold’s appeal as a safe haven. Notably, Secretary of State Antony Blinken remarked that the US does not favor prolonged Israeli military action in Lebanon and is working to initiate new Gaza ceasefire talks.

Today, investors should monitor developments in the Middle East and upcoming data, including the final October Michigan Consumer Sentiment Index.

Gold Technical Analysis:

Gold settled in a high-level consolidation pattern, initially rebounding at $2720 in the European session before facing resistance at $2743. The subsequent correction brought prices back to $2722, where they stabilized for the session close. Gold remains in a broad consolidation range, with $2700 serving as a key support level.

Gold Near Record High Amid Yield Decline; Oil Dips
(Gold Futures, 1-day chart) 

Today’s Focus:

Consider a sell-on-rally approach, with a secondary buy on pullbacks.

  • Key Resistance: $2745-$2750
  • Key Support: $2722-$2717

Oil

Oil prices extended their decline on Thursday, pressured by reports that the US and Israel are exploring renewed Gaza ceasefire talks and concerns over weaker European demand. WTI December crude fell by $0.58, or 0.82%, to $70.19 per barrel, while Brent crude for December dropped 0.77%, closing at $74.38 per barrel.

Earlier, oil prices had risen nearly $1 on fears of supply disruptions from the Middle East and increased uncertainty ahead of the November 5 US presidential election. However, reports of potential ceasefire negotiations between the US and Israel weighed on prices.

US and Israeli negotiators are reportedly set to meet in Doha within days to restart ceasefire talks and discuss the release of hostages in Gaza. Meanwhile, Hamas representatives, now in Cairo, have signaled no shift in their stance on the terms of a ceasefire agreement.

Additionally, concerns over weaker European oil demand continued to apply downward pressure. A recent survey indicated a downturn in European business activity, with both domestic and international demand falling, placing the Eurozone firmly in contraction territory. In the UK, two additional surveys showed that business sentiment remains subdued.

Today, market participants should keep an eye on Middle East developments, the speech from 2025 FOMC voter and Boston Fed President Susan Collins, and the US Michigan Consumer Sentiment Index.

Oil Technical Analysis:

Oil reversed earlier gains on Thursday, with a temporary climb to $72.3 met by resistance and subsequent retracement below session lows. The daily candlestick closed with a bearish pattern, suggesting continued range-bound volatility in the near term.

Gold Near Record High Amid Yield Decline; Oil Dips
(Light Crude Oil Futures, 1-day chart) 

Today’s Focus:

Consider a sell-on-rally approach, with secondary buy opportunities on dips.

  • Key Resistance: $71.5-$72.0
  • Key Support: $69.5-$69.0

Risk Disclosure
Securities, Futures, CFDs and other financial products involve high risks due to the fluctuation in the value and prices of the underlying financial instruments. Due to the adverse and unpredictable market movements, large losses exceeding your initial investment could incur within a short period of time.  
Please make sure you fully understand the risks of trading with the respective financial instrument before engaging in any transactions with us. You should seek independent professional advice if you do not understand the risks explained herein. 

Disclaimer
This information contained in this blog is for general reference only and is not intended as investment advice, a recommendation, an offer, or an invitation to buy or sell any financial instruments. It does not consider any specific recipient’s investment objectives or financial situation. Past performance references are not reliable indicators of future performance. Doo Prime and its affiliates make no representations or warranties about the accuracy or completeness of this information and accept no liability for any losses or damages resulting from its use or from any investments made based on it. 
The above strategies reflect only the analysts’ opinions and are for reference only. They should not be used or considered as the basis for any trading decisions or as an invitation to engage in any transaction. Doo Prime does not guarantee the accuracy or completeness of this report and assumes no responsibility for any losses resulting from the use of this report. Do not rely on this report to replace your independent judgment. The market is risky, and investments should be made with caution. 

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