On Thursday, the Federal Reserve’s initiation of an easing cycle attracted buyers, supporting gold prices. Despite robust US jobless claims data, which briefly pressured gold, the metal ultimately rose 1.07%, closing at $2,586.56 per ounce.

Meanwhile, escalating tensions in the Middle East, including Israeli airstrikes on Lebanon and US officials admitting President Biden’s inability to secure a Gaza ceasefire, boosted oil prices, which rose over 1%.

Gold

The Federal Reserve’s initiation of a monetary easing cycle attracted buying support for gold. Despite the release of stronger-than-expected US jobless claims on Thursday, which briefly weighed on gold, the metal closed 1.07% higher at $2,586.56 per ounce, reaching an intraday high of $2,594.79, nearing Wednesday’s record high. Investors should keep an eye on the Bank of Japan’s interest rate decision today.

The US dollar fell Thursday, providing additional support for gold, with the dollar index—which tracks the currency against a basket of six others—dropping 0.38% to 100.64.

Markets continue to digest the Fed’s significant 50-basis-point rate cut and shift towards a more accommodative monetary policy stance, with Morgan Stanley revising its dollar risk outlook to neutral.

Geopolitical conflict also fueled safe-haven demand for gold. Reports indicated that US officials no longer expect a ceasefire between Israel and Hamas before President Biden’s term ends.

Allegiance Gold COO Alex Ebkarian remarked that combining geopolitical risks with current deficits, a low-yield environment, and a weakening dollar is driving gold’s surge.

Gold Technical Analysis:

Gold saw a strong upward move yesterday, peaking at $2,595 before pulling back. Despite the retreat, gold remained in a high-level consolidation phase, suggesting that the bullish trend is not yet over.

Today’s Focus:

Today’s trading strategy suggests selling into rallies while buying on dips.

• Resistance: $2,596–$2,600
• Support: $2,560–$2,545

Oil

On Thursday, Israeli airstrikes on Lebanon and US officials acknowledging that President Biden cannot broker a Gaza ceasefire—along with the Fed’s rate cut and declining global oil inventories—helped oil prices rebound.

WTI crude for October delivery rose $1.04, or 1.5%, to settle at $71.95 per barrel, while Brent crude for November delivery climbed $1.23, or 1.7%, to settle at $74.88 per barrel.

Reports late Thursday indicated that Israeli jets launched their most intense airstrikes in nearly a year on southern Lebanon, intensifying the conflict with Hezbollah.

Additionally, The Wall Street Journal reported that US officials do not expect a ceasefire agreement between Israel and Hamas during President Biden’s term.

Beyond geopolitical factors, the Fed’s rate cut boosted demand prospects, while a weakening dollar supported oil prices. US crude oil inventories fell to their lowest levels in a year, according to data released Wednesday. Citi analysts expect an unseasonal supply shortfall of around 400,000 barrels per day next quarter, which should keep Brent crude prices in the $70–$75 range.

Oil Technical Analysis:

Oil saw a steady upward move yesterday, bouncing from the $69.0 level and pushing higher to reach $71.1 before pulling back slightly. The mid-term outlook remains bearish, as the price stays below key support levels, though short-term trends suggest further upside.

Today’s Focus:

Today’s strategy suggests focusing on buying on dips while selling into rallies.

• Resistance: $71.0–$72.0
• Support: $69.5–$68.5

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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. 
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