Gold Slight Decline, Market Focus on Non-Farm Payrolls Data

Gold ended Friday with a decline, putting an end to its four-day consecutive upward trend, while oil climbed about 1% last Friday.

This week, the market is closely watching economic data like U.S. inflation and non-farm payrolls, and the European Central Bank is set to release minutes from its July meeting on Thursday.

Gold>>

Gold prices declined on Friday, putting an end to their four-day consecutive upward trend, following remarks from Federal Reserve Chair Powell indicating the potential need for further interest rate hikes.

Gold settled down 0.4%, with the closing price at $1939.90. The rise in the U.S. dollar and the benchmark 10-year U.S. Treasury yield weakened the appeal of non-yielding gold.

Last week, gold exhibited overall volatile gains, surpassing the $1900 mark. This week, mounting global geopolitical and economic uncertainties prompted investors to seek refuge in both the U.S. dollar and gold, leading to a scenario of simultaneous gains and losses in both. However, the rise in the dollar also constrained the increase in dollar-denominated gold prices.

Gold found some support this week as weak business activity data raised speculation about limited room for further Fed rate hikes. The market’s focus remains on U.S. inflation, non-farm payrolls, and economic data, with the European Central Bank set to release minutes from its July meeting on Thursday.

Technical Analysis:

Today’s short-term strategy for gold suggests prioritizing short positions on higher rebounds, with long positions on minor pullbacks as a secondary approach.

  • Key resistance levels to watch in the short term are around 1925-1930.
  • Key support levels to watch in the short term are around 1900-1905.

WTI Crude Oil >>

Crude oil climbed by about 1% last Friday, reaching a weekly high. This surge was driven by a sharp increase in U.S. diesel prices, a decline in active oil rigs, and a refinery fire in Louisiana.

Analysts noted, ‘The concerns primarily revolved around diesel prices, diesel crack spreads, and diesel shortages during refinery maintenance.’

This week, Brent crude fell by less than 1%, and U.S. crude dropped by around 2%. Both benchmarks experienced a 2% decline last week. Despite weak economic data from Germany, the largest economy in Europe, crude oil prices continued to rise.

Analysts project that Brent crude prices are likely to find solid support around $80 per barrel, with a potential scarcity of crude oil for the remainder of the year, followed by a minor surplus in early 2024.

Technical Analysis:

Today’s short-term strategy for crude oil suggests prioritizing short positions on higher rebounds, with long positions on minor pullbacks as a secondary approach.

  • Key resistance levels to monitor in the short term are around 81.0-80.5.
  • Key support levels to monitor in the short term are around 78.0-78.5.

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