Yesterday, the US dollar held steady against a basket of major currencies, with hopes that three central bank meetings scheduled this week would provide guidance on the currency policy outlook, supporting the rise in gold prices due to risk aversion.
Additionally, signs of tightening supply and commitments from the world’s second-largest economy to support its economy pushed oil prices to a three-month high.
Gold >>
Yesterday, the gold price rose as the U.S. dollar stabilized, and market expectations grew that the Federal Reserve might end its monetary tightening cycle after raising rates this week.
Despite the overnight rebound of the U.S. dollar index and rising US bond yields, leading to a continuous uptrend in the U.S. stock market and putting downward pressure on gold prices, ongoing tensions between Russia and Ukraine and concerns over global economic recession, intensified by June PMI data in Europe and the U.S., provided safe-haven support for gold.
As the Federal Reserve’s interest rate decision approaches, market sentiment is cautious, and both bulls and bears remain watchful. The focus remains on the Fed’s meeting on Wednesday and the European Central Bank’s decision on Thursday, with expectations that both central banks will raise rates. Gold is highly sensitive to interest rate hikes, as they increase the opportunity cost of holding non-yielding gold.
Gold has faced bearish pressure for three consecutive trading days, with short-term resistance hovering around the 1970-1972 levels. If it holds steady here, further upward movement is possible, providing room for a bullish rebound.
If recent bullish momentum continues, the resistance could shift higher around the 1980 level. Overall, gold remains in a consolidation phase, characterized by time-based oscillation.
Technical Analysis:
Today’s short-term strategy for gold suggests prioritizing short positions on rebounds and long positions on pullbacks.
- Key resistance levels to focus on are around 1968-1970.
- Key support levels to monitor are around 1943-1945.
WTI Crude Oil >>
Yesterday, during the early Asian trading session, oil prices continued their upward trend, with WTI crude trading near $79.35 per barrel and briefly touching a three-month high at $79.87 per barrel.
Signs of tightening supply and commitments to support the economy by the world’s second-largest economy boosted market sentiment.
Despite stable and volatile international oil prices, bearish economic data from the Eurozone and the United States highlighted global economic weakness, limiting further gains.
However, due to the prevailing bullish fundamentals and a technical breakthrough with A-shares surging on Tuesday, oil prices may continue to rise in the short term, with potential for further gains towards the $80 psychological level.
Yesterday’s oil price technicals showed a strong bullish momentum with steady upward movement, achieving the target above $79 after consolidating around the $78.2 level. Currently, short and medium-term technical indicators are in a bullish alignment and diverging upwards.
Technical Analysis:
For today’s short-term oil trading strategy, it is advisable to focus on buying on pullbacks and consider selling on rebounds.
- Short-term focus on the upside resistance level around $80 to $80.5.
- Short-term focus on the downside support level around $77.8 to $78.3.
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While every effort has been made to ensure the accuracy of the information in this document, DOO Prime does not warrant or guarantee the accuracy, completeness or reliability of this information. DOO Prime does not accept responsibility for any losses or damages arising directly or indirectly, from the use of this document. The material contained in this document is provided solely for general information and educational purposes and is not and should not be construed as, an offer to buy or sell, or as a solicitation of an offer to buy or sell, securities, futures, options, bonds or any other relevant financial instruments or investments. Nothing in this document should be taken as making any recommendations or providing any investment or other advice with respect to the purchase, sale or other disposition of financial instruments, any related products or any other products, securities or investments. Trading involves risk and you are advised to exercise caution in relation to the report. Before making any investment decision, prospective investors should seek advice from their own financial advisers, take into account their individual financial needs and circumstances and carefully consider the risks associated with such investment decision.
