Gold
With the Fed’s rate cut of 25 basis points, lowering the federal funds target to 4.5%-4.75%, the dollar fell 0.6% to 104.33, and 10-year U.S. Treasury yields dropped 10.57 basis points. This decline supported gold, which regained the $2,700 level, closing at $2,706.51, up 1.78%.
The Fed’s statement omitted prior confidence on inflation control, hinting at a potential December pause. Powell provided little additional guidance on further cuts. Poor U.S. job data further weighed on the dollar, with initial jobless claims rising and continued claims reaching their highest since late 2021.
In geopolitical developments, Israel conducted airstrikes on Hezbollah in southern Lebanon, boosting safe-haven demand for gold.
Today, investors will watch for updates on geopolitical tensions, the U.S. November Michigan Consumer Sentiment Index, and Fed commentary.
Gold Technical Analysis:
Gold saw a reversal after an initial drop below $2,643, later rebounding strongly past $2,710 to close with a bullish candlestick, indicating continued wide-range volatility above $2,700.
Today’s Focus:
- Resistance: $2,718-$2,725
- Support: $2,667-$2,655
Oil
On Thursday, oil prices rose as a weaker dollar, geopolitical events, and hurricane disruptions supported prices despite pressure from Trump’s election win. WTI December crude closed up $0.67 (0.93%) at $72.36, while Brent January crude rose $0.71 (0.95%) to $75.63 per barrel.
Trump’s win raised concerns over potential shifts in U.S. energy policies. Analysts noted that his administration might reinstate strict sanctions on Iran and Venezuela, potentially cutting global supply by up to 1 million barrels per day.
Citi analysts cautioned that Trump’s win brings mixed effects for oil, with potential tariffs and OPEC+ supply adjustments creating additional challenges.
Hurricane Rafael also provided some support, shutting down approximately 17% of Gulf of Mexico oil production, equal to about 304,418 barrels per day, according to U.S. government data.
Today, investors should monitor geopolitical news, market reactions to Trump’s victory, and the weekly U.S. oil rig count.
Oil Technical Analysis:
Oil experienced a V-shaped recovery, finding support near $70.7 before rallying to close around $72.8, with a bullish candlestick indicating continued upside momentum.
Today’s Focus:
- Resistance: $72.8-$73.8
- Support: $69.7-$69.0
