Gold
Gold prices dipped to a nearly two-month low of $2,536.68 per ounce on Thursday, pressured by a robust rebound in the US dollar. However, bargain buying helped narrow the losses, with gold closing 0.32% lower at $2,564.66 per ounce.
The US dollar surged against major currencies, hitting a one-year high and extending its rally for the fifth consecutive day. This strength was driven by market optimism surrounding Trump’s potential return to the White House, exerting downward pressure on gold prices.
Late in the session, Federal Reserve Chair Jerome Powell’s hawkish remarks in Dallas further bolstered the dollar. Powell noted, “The economy hasn’t signaled any need for us to rush into rate cuts.” While acknowledging balanced risks for inflation and employment, Powell reaffirmed the Fed’s commitment to its 2% inflation target, emphasizing the need to “finish the job.”
Adam Hetts, Head of Global Multi-Asset at Janus Henderson, commented that Powell’s statements tempered overly optimistic rate-cut expectations. The CME FedWatch tool indicated that the probability of a 25-basis-point rate cut in December fell to 58.9% from 82.5% the previous day, while the likelihood of no rate cut rose to 41%.
Economic data showed US producer prices rebounding in October, with costs for portfolio management and airfares driving the increase, suggesting inflationary pressures remain sticky. Additionally, initial jobless claims for the week ending November 9 fell by 4,000 to 217,000, hinting at resilience in the labor market.
Gold Technical Analysis:
Gold displayed a “V-shaped” recovery during Thursday’s session, rebounding from intraday lows. After dipping below the $2,540 support level, it surged past $2,570 before retreating to $2,564. The daily chart signals a potential bottom near $2,536, with bullish momentum likely to return above $2,570.
Today’s Focus:
- Strategy: Focus on sell-on-rallies with secondary buy-on-dips.
- Resistance: $2,580–$2,585
- Support: $2,550–$2,545
Oil
Crude oil prices edged higher on Thursday as a significant drop in US fuel inventories outweighed concerns over weak demand. WTI crude futures for December delivery rose 0.39% to $68.70 per barrel, while Brent crude for January delivery gained 0.39% to settle at $72.56 per barrel.
The US Energy Information Administration (EIA) reported that gasoline inventories dropped by 4.4 million barrels last week, the largest decline since November 2022, compared to analysts’ expectations for a 600,000-barrel increase. However, crude oil inventories surged by 2.1 million barrels, far exceeding the expected 750,000-barrel build, limiting oil price gains.
Despite the inventory-driven support, a strong dollar and lingering demand concerns capped the rally. Danish Lim, an investment analyst at Phillip Nova, noted that the rising dollar exerts significant downward pressure on crude prices, increasing the likelihood of further volatility and potential downside.
Looking ahead, the International Energy Agency (IEA) predicted that global oil supply will exceed demand by 2025, even if OPEC+ maintains its production cuts. The IEA maintained its forecast for 2025 oil demand growth at 990,000 barrels per day, significantly lower than the 2 million barrels per day seen in 2023.
Geopolitical tensions also remain in focus, as Iran’s army commander threatened a “devastating” response to Israel, while the US submitted a ceasefire proposal to Lebanon’s parliament.
Oil Technical Analysis:
Oil prices showed mixed movement, testing resistance at $69.3 before retreating to close near $68.7. The daily chart indicates a bearish bias, with the $69.3 resistance acting as a cap on further gains.
Today’s Focus:
- Strategy: Focus on sell-on-rallies with secondary buy-on-dips.
- Resistance: $69.8–$70.3
- Support: $67.5–$67.0
Risk Disclosure
Securities, Futures, CFDs and other financial products involve high risks due to the fluctuation in the value and prices of the underlying financial instruments. Due to the adverse and unpredictable market movements, large losses exceeding your initial investment could incur within a short period of time.
Please make sure you fully understand the risks of trading with the respective financial instrument before engaging in any transactions with us. You should seek independent professional advice if you do not understand the risks explained herein.
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.
