Market Overview
On Wednesday, gold prices continued to climb, driven by a weaker US dollar and declining Treasury yields, as well as rising safe-haven demand amid trade uncertainties. Gold reached an intraday high of $2,882.25 per ounce before settling at $2,867.12 per ounce, marking another record high.
Meanwhile, US crude oil inventories surged by over 8 million barrels, significantly exceeding market expectations and putting downward pressure on oil prices. Both WTI and Brent crude fell more than 2%, closing lower.
Gold Overview
Gold continued its bullish rally on Wednesday, reaching a new all-time high of $2,882.25 per ounce before closing 0.88% higher at $2,867.12 per ounce.
Key Gold Market Drivers
- US Economic Data:
- January ADP Employment: Added 183,000 jobs, the highest since October, beating expectations of 150,000.
- ISM Services PMI: Unexpectedly cooled, falling from 54.0 in December to 52.8 in January, missing the 54.3 forecast, offsetting the strong ADP report.
- December Trade Deficit: Widened 24.7% to $98.4 billion, the largest since March 2022.
- Impact on Dollar and Treasury Yields:
- The US dollar index fell to a one-week low.
- 10-year Treasury yields plunged 2.3% to 4.42%, marking the largest single-day drop in three weeks, further fueling gold’s rally.
- Global Gold Demand:
- World Gold Council Report: 2024 global gold demand hit a record high, driven by central bank purchases and investment inflows.
- Total gold demand (including OTC transactions) reached 4,974 tons, valued at $382 billion, both historic records.
- China’s gold ETF assets surged 150%, also a record high.
Key Events to Watch Today
- US Initial Jobless Claims data.
- Speeches from Federal Reserve officials, including Governor Christopher Waller.
- Market reaction to Trump’s latest policy announcements.
Technical Analysis for Gold
Gold continued its strong bullish trend, breaking through key resistance levels:
- Asian session: Held firm above $2,840, showing strength.
- European session: Broke past $2,850 and $2,860, accelerating gains.
- US session: Surged to $2,877, before consolidating near the highs.
- Daily Chart: Formed a strong bullish breakout, with price action supported by the 5-day moving average.
Today’s Focus – Gold
- Primary strategy: Buy on dips, sell on rebounds.
- Resistance Levels: $2,890–$2,900.
- Support Levels: $2,860–$2,850.
Oil Overview
On Wednesday, oil prices fell sharply, driven by:
- Concerns over trade tensions reducing global demand.
- A massive surge in US crude inventories, signaling weaker consumption.
Oil Performance
- WTI Crude (March): – $1.67 (-2.3%), closing at $71.03 per barrel.
- Brent Crude (April): – $1.59 (-2.08%), closing at $74.61 per barrel.
EIA Report Highlights
- US Crude Oil Inventories surged by 8.66 million barrels, far exceeding expectations of 1.03 million barrels.
- This marks the largest inventory build since February 9, 2024.
- Refinery demand remains weak, with refiners cutting capacity due to sluggish gasoline demand.
John Kilduff, partner at Again Capital, commented:
“Refineries are reducing crude intake due to weak gasoline demand and seasonal maintenance.”
Geopolitical Factors
- Iran & OPEC Tensions:
- Iranian President Pezeshkian urged OPEC unity to counter potential US sanctions.
- Trump recently stated he plans to reinstate “maximum pressure” on Iran, increasing geopolitical risks.
Technical Analysis – Oil
- WTI crude remained in a strong downtrend:
- Asian & European sessions: Faced resistance at $73, triggering a steady decline.
- US session: Dropped below $72, hitting $71 before a weak rebound.
- Daily Chart: Confirmed bearish continuation, failing to hold above $73, signaling further downside.
Today’s Focus – Oil
- Primary strategy: Favor short positions on rebounds, with limited buying opportunities.
- Resistance Levels: $72.3–$72.8.
- Support Levels: $70.0–$69.5.
Risk Disclosure
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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 information 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.
