Gold
With Trump’s victory, the dollar index surged past 105, reaching a four-month peak. Gold tumbled nearly $85 during the day, closing down 3.1% at $2,659.56 per ounce, marking its largest one-day drop since June 7.
Trump’s win led to a strong dollar rebound as markets anticipated his policies on immigration, taxes, and trade could stimulate U.S. growth and inflation. StoneX analyst Rhona O’Connell noted that Trump’s win eliminated some uncertainty and boosted the dollar, resulting in gold’s decline.
Trump’s presidency also suggests the Fed may not cut rates as aggressively as expected. Bank of America believes fiscal expansion under Trump could raise the Fed’s neutral rate forecast, and any large tariff increases could pause rate cuts due to inflation and growth concerns.
The market now awaits the Fed’s November rate decision and Powell’s press conference, set for Friday early morning Beijing time. Today, investors are also watching initial U.S. jobless claims and further analysis of Trump’s victory impact.
Gold Technical Analysis:
Gold experienced a sharp drop, stabilizing around the $2,700 level before a short-lived rebound and later closing weak near $2,652. Technical indicators point to a bearish outlook, with increased selling pressure above $2,730.
Today’s Focus:
- Resistance: $2,680-$2,685
- Support: $2,650-$2,645
Oil
On Wednesday, a stronger dollar pressured oil prices, while U.S. EIA crude inventories rose more than expected, with hurricane-related disruptions providing some support. WTI December crude closed down $0.30 (0.42%) at $71.69, while Brent January crude closed down $0.61 (0.81%) at $74.92 per barrel.
Trump’s win lifted the dollar sharply, potentially dampening global oil demand due to expected trade policies. UBS analyst Giovanni Staunovo suggested Trump’s trade policies could impact demand significantly.
Although Trump’s policies may pose demand risks, new sanctions under his administration on major oil-producing nations could tighten supply. Potential sanctions on Iran and Venezuela might reduce global supply by up to 1.3 million barrels per day, supporting prices.
EIA data showed U.S. crude stocks hit their highest since August, with a build of 2.149 million barrels, above the expected 1.103 million. However, concerns about tropical storm Rafael disrupting Gulf of Mexico production slightly limited oil’s losses.
Today, investors should watch U.S. jobless claims and September wholesale sales data, along with geopolitical news.
Oil Technical Analysis:
Oil saw a V-shaped recovery, stabilizing near $70 before rebounding to close around $72.6. The daily candlestick shows a bottoming recovery, with resistance near $73.
Today’s Focus:
- Resistance: $73.0-$73.5
- Support: $71.0-$70.5
