Dollar Strength Limits Gold’s Upward Space, Oil Price Turns from Decline to Rise

The geopolitical situation provides support for the gold price, but the slight increase in the dollar restricts the upward space for gold. The gold price is slightly down but remains relatively stable. Investors are waiting for US economic data to provide clues for the possibility of a Fed rate cut.

The strength of the dollar suppresses oil prices to near two-month lows, but a decrease in US crude inventories and growing market concerns about supply shortages provide support for oil prices, causing them to turn from decline to rise.

Gold >>

On Wednesday, geopolitical tensions provided support for the gold price, but a slight increase in the dollar limited the upward space for gold. The gold price dipped slightly but remained relatively stable, as investors awaited US economic data for clues on potential Fed interest rate cuts.

Spot gold remained volatile throughout the day, closing down by 0.22% at USD 2308.74 per ounce. The latest data showed that the US added fewer jobs than expected, coupled with the Fed’s inclination towards easing policy, reinforcing expectations of a possible interest rate cut by the end of the year.

However, the market bet on the US economy outperforming other major economies, leading to a 0.13% rise in the dollar. The strength of the dollar diminished the attractiveness of gold.

Yesterday, gold’s technical aspect was overall chaotic and volatile. During the Asian-European session, it quickly broke below the USD 2307 level but stabilized and rebounded. It then slightly breached the USD 2320 level but faced pressure, leading to a weak downward trend.

In the afternoon, it once again dropped below the morning’s rally point of USD 2307, reaching the USD 2303 level before rebounding. During the US session, there was a second attempt to break above USD 2320, but it faced resistance and closed weakly.

Technical Analysis:

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

  • Key resistance levels to watch in the short term are around 2333-2340.
  • Key support levels to watch in the short term are around 2300-2306.

WTI Crude Oil >>

On Wednesday, due to the strength of the dollar, oil prices briefly fell to near two-month lows. However, with a decrease in US crude inventories and growing market concerns about supply shortages, oil prices found support and turned from decline to rise.

WTI crude oil rose to an intraday high of USD 78.91 per barrel, ultimately closing up by 1% at USD 78.89 per barrel; Brent crude oil rose by 0.74%, closing at USD 83.53 per barrel. Earlier, influenced by factors such as the strength of the dollar and poor demand prospects, oil prices briefly fell to near two-month lows.

However, they later turned from decline to rise. On one hand, data showed a decrease in US crude inventories last week. On the other hand, Russia launched its largest-scale airstrikes in weeks, causing market concerns about supply shortages to intensify.

Additionally, the US buying on dips to replenish strategic reserves also provided support for oil prices. Yesterday, oil prices experienced a technical trajectory of initial suppression followed by a rebound. During the Asian-European session, they showed weak downward movement below USD 78.4.

Rebounded in the afternoon, breaking through the USD 78 integer mark and stabilizing, then rebounding further. Ultimately, oil prices continued their upward trend, breaking through and closing above the morning’s opening decline level of USD 78.4, reaching above USD 79.

Technical Analysis:

Today’s crude oil trading strategy suggests prioritizing short positions during rebounds, with long positions considered as a secondary approach during pullbacks

  • Key resistance levels to monitor in the short term are around 80.0-80.6.
  • Key support levels to monitor in the short term are around 77.6-77.0.

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