Market Recap
On Friday, gold traded near $3,740.57/oz, narrowing Thursday’s gains after stronger U.S. jobless claims data dampened some dovish Fed bets. Investors are awaiting the PCE inflation report, due later today, which could guide the Fed’s next policy move.
Oil steadied around $65.25/barrel after hitting a seven-week high earlier in the week. Russia announced extended fuel export restrictions through year-end, but upbeat U.S. economic data capped further upside.
Gold
Gold’s advance narrowed on Thursday after weekly jobless claims unexpectedly fell to 218,000 versus expectations of 235,000, reducing some rate-cut optimism. Traders are now focused on August’s PCE inflation index, the Fed’s preferred gauge. Reuters surveys expect a 0.3% MoM rise and 2.7% YoY.
Peter Grant, VP at Zaner Metals, said: “The jobless claims data looked slightly hawkish, enough to temper easing expectations, but not a trend-changer. The short-term risk for gold is a hotter-than-expected PCE print, which could lift the dollar and pressure gold.”
According to CME FedWatch, markets now assign an 85% probability of an October rate cut, down from 90% before the labor data release.
Technical Outlook:
Gold remains in a bullish consolidation. Thursday’s range between $3,780 high and $3,717 low suggests near-term sideways trading. Strategy remains to buy dips at key support rather than chasing strength.
- Resistance: $3,765–$3,775
- Support: $3,725–$3,715
Oil
Oil steadied after Wednesday’s 2.5% surge to multi-week highs. Brent crude +0.16% to $69.42, while WTI crude slipped –0.02% to $64.98.
Russia said it will maintain gasoline export bans and partially restrict diesel exports through year-end following recent Ukrainian drone attacks on refineries, adding supply-side support.
However, stronger U.S. economic data limited gains. The Commerce Department revised Q2 GDP growth to 3.8% annualized, higher than prior estimates, tempering expectations of aggressive Fed easing.
Phil Flynn, senior analyst at Price Futures Group, noted: “The market’s first reaction to the GDP data was to sell.”
Technical Outlook:
Oil remains range-bound mid-term but shows strong short-term upside momentum. Moving averages are bullishly aligned, with MACD signaling strong buying pressure. Prices are expected to continue upward in the near term.
- Resistance: $66.5–$67.5
- Support: $64.0–$63.0
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