Market Overview
On Tuesday, Trump’s tariff threats fueled rising risk aversion, driving safe-haven demand for gold. Gold prices surged for the fourth straight session, setting a new all-time high and closing up nearly 1% at $2,842.07 per ounce.
Meanwhile, oil prices experienced a V-shaped reversal—WTI crude initially dropped over 3% amid trade tension concerns but later pared losses after Trump reinstated maximum pressure on Iran, with Brent crude turning positive.
Gold Overview
Gold prices continued their rally on Tuesday, reaching an intraday high of $2,845.30 per ounce before closing 0.97% higher at $2,842.07 per ounce.
The US dollar index weakened, falling below the 108 level, providing additional support for gold, as a weaker dollar makes gold more attractive to investors. The previous day, Trump postponed additional tariffs on Mexico and Canada, leading markets to interpret his tariff threats as a negotiating strategy rather than a definitive policy.
Markets are also closely watching Trump’s potential tariffs on the European Union.
Goldman Sachs analysts stated:
“The outlook for broader EU tariffs remains uncertain, but persistent trade tensions alone are enough to weigh on the euro.”
Economic Data Impact
- US JOLTS job openings for December fell to 7.6 million, the lowest in three months and just above the post-pandemic low.
- Weak labor data weighed on US Treasury yields and the dollar, further boosting gold prices.
Key Events to Watch
- US January ADP employment report.
- Speeches from multiple Federal Reserve officials, including 2027 FOMC voter Thomas Barkin (Richmond Fed) and 2025 FOMC voter Austan Goolsbee (Chicago Fed).
Technical Analysis for Gold
Gold saw a brief pullback to $2,807 before rebounding strongly, breaking through key resistance at $2,824 and continuing its upward momentum. In the late session, gold spiked to $2,845 before consolidating. The daily candlestick closed as a strong bullish breakout, with gold maintaining a firm uptrend above the 5-day moving average.
Today’s Focus – Gold
- Strategy: Favor buying on pullbacks, with short positions on rebounds as a secondary approach.
- Resistance Levels: $2,855–$2,860.
- Support Levels: $2,828–$2,823.
Oil Overview
On Tuesday, oil prices saw a V-shaped recovery, initially tumbling over 3% on fears that trade tensions could dampen demand. However, oil later rebounded sharply after Trump reinstated maximum pressure on Iran, lifting both WTI and Brent crude.
- WTI Crude (March): – $0.46 (-0.63%), closing at $72.70 per barrel.
- Brent Crude (April): + $0.24 (+0.31%), closing at $76.20 per barrel, after initially falling 2.4% intraday.
Key Market Drivers
- Concerns over lower global oil demand due to trade uncertainties weighed on WTI crude, which dipped below its 50-day moving average of $72.05.
- OPEC+ announced plans to gradually increase oil production from April, reinforcing a bearish market sentiment.
Geopolitical Developments
During US trading hours, oil prices surged after Trump signed an executive order reinstating maximum pressure on Iran.
- Reports suggest that US Secretary of State is working to modify or remove existing sanction exemptions to further restrict Iran’s oil exports.
- The US Treasury Department is coordinating efforts to reduce Iranian oil exports to zero.
Inventory Data Impact
- The latest API crude oil inventory report showed a 5.02 million barrel build, the largest since October 4, 2024.
- This follows the previous week’s 2.86 million barrel increase.
- Traders are now awaiting the EIA crude inventory report, which will be released during US trading hours today.
Technical Analysis for Oil
Oil initially faced resistance at $73, triggering a decline below $71, with prices bottoming out around $70.6 before a sharp recovery. The daily candle closed as a bullish reversal, suggesting potential stabilization. However, WTI crude remains below the 10-day moving average of $75, indicating continued downside pressure in the short term.
Today’s Focus – Oil
- Strategy: Favor buying on dips, with short positions on rebounds as a secondary approach.
- Resistance Levels: $74.2–$74.7.
- Support Levels: $71.5–$71.0.
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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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