Gold

On Monday, gold prices fell below the $2,500 mark as a stronger dollar pushed prices to a one-week low near $2,489.90. However, a subsequent rebound saw gold end the day at $2,499.36 per ounce, still below the critical $2,500 level.

Market activity was subdued with the US market closed for a holiday, and gold’s movements closely tracked the dollar. The price initially fell sharply below $2,500, recovering to around $2,507.19 before pulling back as caution prevailed ahead of Friday’s non-farm payroll data release.

UBS analyst Giovanni Staunovo commented, “For gold to move higher, we need clearer guidance on whether there will be a 25 or 50 basis point rate cut. We may get more clarity on this later in the week with the release of employment data.”

Investors are focusing on US August ISM Manufacturing PMI data today and Friday’s US non-farm payroll data to gauge the extent of the Federal Reserve’s expected September rate cut.

Gold Technical Analysis:

On Monday, during the Asian session, gold fell sharply, breaking below the $2,500 level and briefly touching $2,490 before a quick rebound led to a period of consolidation.

In the European session, the price briefly spiked above $2,507 before falling back into a sideways range. With the market closing early due to the US holiday, volatility was limited, and prices remained below the $2,515 resistance, consolidating in a tight range.

Today’s Focus:

The short-term strength or weakness in gold prices hinges on the $2,515 level. Unless the price breaks and holds above this point on the daily chart, any rebound could present a selling opportunity.

• Resistance Levels: $2,515-$2,520
• Support Levels: $2,485-$2,480

Oil

Oil prices saw a slight rebound on Monday amid ongoing Middle East tensions following an attack on the Saudi supertanker Amjad in the Red Sea.

WTI crude gained $0.49 or 0.7% to close at $74.04 per barrel, while Brent crude rose $0.59 or 0.8% to settle at $77.52 per barrel. This comes after both WTI and Brent crude fell 3.1% and 1.4%, respectively, last Friday.

The attack on the Saudi tanker, with the assailants still unknown, raised concerns about potential supply disruptions. Meanwhile, the standoff in Libya over control of the central bank and oil revenues continues.

SEB’s Chief Commodity Analyst, Bjarne Schieldrop, noted, “The current instability in Libyan oil production might create space for OPEC+ to increase supply. However, such disruptions have become quite normal in recent years, suggesting any halt in production may be short-lived; there are already signs of a resumption.”

Geopolitical factors continue to support oil prices. Israeli Prime Minister Benjamin Netanyahu on Monday rejected calls to ease military presence in southern Gaza as part of a ceasefire agreement, citing the strategic importance of controlling a key supply route for Hamas.

A Reuters survey released on Monday showed that OPEC oil production in August fell to its lowest level since January. Investors will continue to monitor geopolitical developments on Tuesday. Note that due to the US public holiday on Monday, the release of the API crude inventory data,

Oil Technical Analysis:

On Monday, oil prices showed a modest recovery in a choppy trading session but remained capped below the $74.4 resistance level, continuing a weak consolidation.

The daily candlestick chart shows a small bullish candle, with short-term support around the $73 level indicating a weak bounce. The daily chart remains bearish below the $75 resistance.

Today’s Focus:

Today’s strategy suggests focusing on buying at dips (low buy) and selling at rallies (high sell).

• Resistance Levels: $74.5-$75.0
• Support Levels: $72.5-$72.0

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