On Monday, growing expectations for a rate cut by the US Federal Reserve next week and heightened geopolitical tensions from Israeli airstrikes on Syria drove gold prices back above the $2,500 mark.
Meanwhile, fears that an upcoming hurricane could disrupt oil production and refining along the US Gulf Coast lifted both WTI and Brent crude prices by over 1%.
Gold
On Monday, with increasing expectations of a US Federal Reserve rate cut next week and rising geopolitical risks following Israeli airstrikes on Syria, gold prices made a strong recovery above the $2,500 mark.
Spot gold closed up 0.34% at $2,506.09 per ounce, as investors awaited Wednesday’s US inflation report for more clues on the potential scale of the Fed’s rate cut.
During the Asian session, spot gold declined and briefly hit an intraday low of $2,485.48 per ounce. However, prices rebounded later as US bond yields faced resistance, providing an opportunity for a recovery in gold prices.
Geopolitical tensions in the Middle East also fueled safe-haven demand, supporting gold’s rebound.
According to AFP, Israeli airstrikes in central Syria on September 8 killed at least 14 people. On September 9, Iran’s Foreign Ministry condemned the “criminal attack” by the Israeli military and called on Israel’s supporters to stop arming it.
“Gold prices are likely to remain relatively stable, possibly experiencing minor fluctuations within the current range,” said Peter A. Grant, Vice President and Senior Metals Strategist at Zaner Metals. He expects gold to reach a new all-time high.
Gold Technical Analysis:
Gold experienced a downward move followed by a rebound on Monday, testing support at the $2,485 level in the Asian and European sessions. After bottoming out and bouncing back in the afternoon, gold prices saw a rapid surge during the US session, briefly breaking above $2,504 before pulling back.
A second rally later in the evening allowed gold to close above $2,505, indicating a consolidation within a broad range of fluctuations.
Today’s Focus:
For today’s trading, consider a strategy of selling on rallies and buying on dips.
- Resistance: Watch the $2,515-$2,520 range.
- Support: Watch the $2,485-$2,480 range.
Oil
On Monday, oil prices rose as concerns over a potential hurricane set to hit Louisiana on Wednesday heightened fears of disruption to oil production and refining along the US Gulf Coast. WTI crude closed up 1.5% at $68.71 per barrel, while Brent crude rose 1.1% to settle at $71.84 per barrel. Investors will keep an eye on the OPEC Monthly Oil Market Report and the EIA Monthly Energy Review today.
The US National Hurricane Center predicts that Tropical Storm “Francine” will strengthen into a hurricane by Tuesday before hitting the Louisiana coast. According to the US Energy Information Administration (EIA), the Gulf Coast accounts for about 50% of the nation’s refining capacity. PVM analyst John Evans noted, “Oil prices are slightly rebounding on the hurricane warnings that could threaten the US Gulf Coast, but the market remains more focused on where demand will come from and what OPEC+ might do.”
Additionally, Morgan Stanley has lowered its Brent crude price forecasts for the next few quarters, citing a period of weak demand similar to that seen during a recession. The bank revised its forecast for Brent prices in Q4 2024 down by $5 per barrel to $75 per barrel.
Oil Technical Analysis:
On Monday, oil prices saw a rebound from lows amidst a volatile trading session. Prices dipped from the $68.8 level in the Asian and European sessions but stabilized and rebounded later, breaking back above the $68 mark during the US session. The daily chart closed with a moderate bullish candlestick, indicating that the $67 level has become a support area.
Today’s Focus:
For today’s trading, consider a strategy of selling on rallies and buying on dips.
- Resistance: Watch the $69.0-$69.7 range.
- Support: Watch the $67.0-$66.0 range.
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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.
