On Tuesday, US retail sales data, came in stronger than expected, boosting the dollar and Treasury yields. As a result, gold slightly retreated from its recent historic high, closing at $2,569.58 per ounce.

Meanwhile, concerns over supply disruptions and ongoing geopolitical tensions supported oil prices, with both WTI and Brent crude rising by about $1, hitting their highest levels in nearly two weeks.

Gold

The US August retail sales data exceeded market expectations, prompting a rebound in the dollar and Treasury yields. At the same time, some traders took profits ahead of the Federal Reserve’s anticipated rate cut this week, causing gold to retreat from its record high. By the close, spot gold had dipped 0.5%, settling at $2,569.58 per ounce.

Data showed that US retail sales in August grew by 0.1%, with the July figure revised upward to a 1.1% gain from the previously reported 1.0%. Economists had expected a 0.2% decline in August sales.

The unexpected growth in August’s retail sales, combined with a drop in the unemployment rate, has led the financial markets to scale back bets on a 50-basis-point Fed rate cut this week.

All eyes are now on the Federal Reserve’s upcoming FOMC meeting, with investors awaiting the interest rate decision and Chair Jerome Powell’s press conference scheduled for Wednesday night.

Gold Technical Analysis:

Gold initially rose but later gave up its gains. During the European session, prices rebounded from the $2,570 level before hitting resistance at $2,586 and retreating.

During the US session, prices repeatedly tested $2,582 before accelerating downward, ultimately breaking below $2,570 and stabilizing near $2,560. The day closed with a bearish candle, reflecting pressure on the upside.

Today’s Focus:

Trading strategy: Favor buying on dips and selling on rebounds.

• Resistance: $2,585-$2,590
• Support: $2,560-$2,555

Oil

On Tuesday, concerns over supply disruptions and geopolitical instability fueled a continued rebound in oil prices. WTI October futures rose by $1.10, or 1.6%, to $71.41 per barrel, while Brent November futures increased by $0.95, or 1.3%, closing at $73.70 per barrel. Both contracts reached their highest settlement prices so far this month.

More than 12% of oil production in the Gulf of Mexico remains shut in the aftermath of Hurricane Francine, lending support to rising oil prices. Senior analyst Charalampos Pissouros from XM commented, “Oil has been in rebound mode since last Wednesday, likely due to supply concerns following Hurricane Francine and expectations of a drop in US crude inventories.”

Geopolitical tensions added further support for oil prices. According to Sky News Arabia, Israel’s intelligence agency Mossad allegedly intercepted a shipment of new pagers intended for Hezbollah months ago and planted explosives in them, leading to a shocking attack on the Lebanese group on Tuesday.

However, stronger-than-expected US retail sales data slightly eased expectations for a 50-basis-point rate cut from the Fed this week, trimming some of the gains in oil prices. Investors should also keep an eye on the EIA crude inventory report, due out later today.

Oil Technical Analysis:

Oil prices rebounded during choppy trading. After initially dipping to support at $69.6, prices recovered during the European session and accelerated during the US session, breaking through $70.7 and reaching a high of $71.9 before retracing slightly. The daily chart shows a strong bullish candle, marking two consecutive days of upward movement after finding support near $69.

Today’s Focus:

Trading strategy: Focus on buying dips and selling rebounds.

• Resistance: $72.5-$73.0
• Support: $70.0-$69.5

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Disclaimer
This information contained in this blog is for general reference only and is not intended as investment advice, a recommendation, an offer, or an invitation to buy or sell any financial instruments. It does not consider any specific recipient’s investment objectives or financial situation. Past performance references are not reliable indicators of future performance. Doo Prime and its affiliates make no representations or warranties about the accuracy or completeness of this information and accept no liability for any losses or damages resulting from its use or from any investments made based on it. 
The above strategies reflect only the analysts’ opinions and are for reference only. They should not be used or considered as the basis for any trading decisions or as an invitation to engage in any transaction. Doo Prime does not guarantee the accuracy or completeness of this report and assumes no responsibility for any losses resulting from the use of this report. Do not rely on this report to replace your independent judgment. The market is risky, and investments should be made with caution.