The market anticipates that the Federal Reserve has not yet concluded its monetary tightening cycle. The U.S. dollar strengthened yesterday, leading to a decline in gold prices. Despite a significant decrease in API crude oil inventories, oil prices were not supported and fell by over 3%. 

Gold >> 

Yesterday, the U.S. dollar strengthened, causing gold prices to drop below $1900 per ounce, with the lowest point touching $1891.46. The minutes from the Federal Reserve’s July policy meeting revealed ongoing disagreements among officials regarding the need for further interest rate hikes.  

The market still anticipates that the Federal Reserve has not yet concluded its monetary tightening cycle, limiting the potential for a gold price rebound. Market analysts indicate that the recent continuous rise in real yields, coupled with a stronger U.S. dollar, has diminished the appeal of gold, prompting some investors to stay away. 

Gold dipped below $1900 in late trading, briefly touching $1891 and then swiftly rebounding. However, in the early morning hours, gold closed around $1892. The sustained downward trend and gradual decline make signs of a rebound unclear. While there are no signs of a rapid decline, there is also a lack of significant signs of a rebound. 

Technical Analysis: 

Today’s gold trading strategy suggests a primary focus on short positions during upward rebounds, while considering long positions on minor pullbacks. 

• Key resistance levels to watch in the short term are around 1900-1905. 
• Key support levels to watch in the short term are around 1875-1880. 

WTI Crude Oil >>

In the early Asian market session today, U.S. crude oil experienced a slight dip, briefly hitting a near two-week low around $78.94 per barrel.  

Despite a significant decrease in U.S. crude oil inventories, oil prices declined by over 3% yesterday as concerns over the economy weighed against expectations of tightening U.S. supply amidst a stock market decline. 

U.S. crude oil exhibited weakened fluctuations yesterday, driven by weaker-than-expected Chinese economic data released this week.  

Growing apprehensions about the future demand for oil intensified as prices continued to drop, further distancing themselves from the nearly nine-month high reached last week. Despite the substantial drop in API crude oil inventories, notable support for oil prices was lacking, leaving short-term risks skewed toward further decline.  

The release of Federal Reserve meeting minutes revealed a lack of consensus among decision-makers regarding the necessity of further rate hikes, contributing to the oil price decline following the stock market. 

Technically, oil prices extended their weak, oscillating downward adjustment trend from yesterday. In the Asian-European trading session, prices marginally fluctuated and consolidated below the $81.5 mark.  

A modest rebound was observed during the late U.S. trading session, only for prices to retreat again around the $81.4 level. The downward oscillation persisted, and in the early hours of the morning, oil prices accelerated their decline, breaching the key $80 psychological level and ending weakly around $79 per barrel. 

Technical Analysis: 

For today’s short-term trading strategy, it is recommended to focus primarily on short positions during upward rebounds, while considering long positions on minor pullbacks. 

• Key resistance levels to watch on the upside: 79.8 – 80.3. 

• Key support levels to watch on the downside: 77 – 77.5. 

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