Gold Rallies as War Fears Mount, Oil Prices Surge 5%

2024-10-02 | Commodities , Daily Analysis , Daily Insight , Gold , Oil , Precious Metals

Gold Rallies as War Fears Mount, Oil Prices Surge 5%

Concerns over a potential full-scale war in the Middle East have intensified, driving a surge in safe-haven demand. Gold prices jumped by more than 1%, rising nearly $30 from Monday’s close. Fears of further escalation in the Middle East gave oil prices a strong upward push, with crude climbing over 5% during the session.

Gold

On Tuesday, fears of a full-scale war in the Middle East escalated, boosting demand for safe-haven assets. Gold prices surged more than 1%, gaining nearly $30 from Monday’s close. Spot gold climbed, briefly reclaiming the $2,670 level, before settling up 1.09% at $2,663.43 per ounce.

According to media reports, after Iranian missile attacks, Israel’s military announced plans for further “significant strikes” across the region. As news of Iran’s missile attacks broke, oil prices jumped 5%, and gold followed suit as the risk of a broader conflict increased.

Despite the rise in risk-off sentiment boosting demand for the dollar, weaker-than-expected U.S. economic data weighed on US Treasury yields, with the 10-year Treasury yield falling by 1.55%, the largest daily drop since September 4. This decline in yields increased the appeal of non-yielding gold.

The market is now focused on US labor data and comments from Federal Reserve officials for clues about future Fed policy.

Gold Technical Analysis:

In technical terms, gold experienced a strong rebound during the day, with the price steadily climbing from the $2,640 support level. European and US sessions saw continuous gains, pushing the price above $2,650, extending the bullish momentum.

By the evening, safe-haven demand accelerated, pushing gold past the $2,670 level, before settling slightly lower near $2,673.

Gold Rallies as War Fears Mount, Oil Prices Surge 5%
(Gold Futures, 1-day chart) 

Today’s Focus:

  • Strategy: Buy on dips, sell on rallies.
  • Resistance: $2,672–$2,677
  • Support: $2,645–$2,640

Oil

On Tuesday, concerns that Iran’s missile strikes on Israel could further escalate tensions in the Middle East provided strong upward momentum for oil prices, with crude surging more than 5% during the session.

WTI crude hit a high of $71.64 per barrel before settling up 3.48% at $70.53. Brent crude also gained 3.54%, closing at $74.35 per barrel.

Earlier, the prospect of increased oil supply and sluggish global demand had kept prices near two-week lows. However, after news of Iran’s planned missile strikes, oil reversed its losses, surging over 5% intraday.

US crude, which had earlier touched a low of $66.93 per barrel, rallied to a high of $71.94, with a swing of $5.01. The US Energy Information Administration (EIA) will release its weekly inventory data on Wednesday.

Besides the EIA report, the market will also focus on US September ADP employment data and further geopolitical developments. Additionally, investors will pay close attention to remarks from Federal Reserve officials.

Oil Technical Analysis:

In technical analysis, oil saw a strong rebound driven by geopolitical concerns, with prices correcting early declines during the European session and stabilizing around the $66.30 level. In the US session, oil continued to rise, breaking through the $70 barrier and closing near $71.90 with strong bullish momentum.

Gold Rallies as War Fears Mount, Oil Prices Surge 5%
(Light Crude Oil Futures, 1-day chart) 

Today’s Focus:

  • Strategy: Buy on dips, sell on rallies.
  • Resistance: $72.0–$72.5
  • Support: $69.7–$69.2

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. 

Market AnalysisIconBrandElement

article-thumbnail

2025-02-07 | Market Analysis

US Market Rises as Investors Watch for Crucial Jobs Data

The US market rose for the third straight day as investors awaited key jobs data, which could influence Federal Reserve policy and market direction.

article-thumbnail

2025-02-07 | Market Analysis

Gold and Oil Edge Lower as Markets Await US Jobs Report

Gold and oil prices dipped as markets remained cautious ahead of the US jobs report, with investors assessing its potential impact on Fed policy.

article-thumbnail

2025-02-06 | Market Analysis

US Markets Gain as Alphabet Suffers a 7% Sell-Off

US markets ended higher despite Alphabet plunging nearly 7% after weaker-than-expected earnings and rising AI-related costs.