Dollar Strengthens, Gold Price Slightly Retreats, Russian Refineries Under Attack Again, Oil Prices Rise for Second Consecutive Day

Due to a significant rebound in U.S. single-family housing starts in February, reaching nearly a two-year high, the dollar strengthened, causing a slight retreat in gold prices. The market awaits the Federal Reserve interest rate decision and Chairman Powell’s speech.

Furthermore, due to escalated attacks by Ukraine on Russian oil refineries, oil prices rose to multi-month highs for the second consecutive trading day, closing slightly higher.

Gold >>

On Tuesday, due to a significant rebound in U.S. single-family housing starts in February, reaching nearly a two-year high, the dollar strengthened, causing a slight retreat in gold prices.

Spot gold fell by 0.13%, closing at USD 2157.40 per ounce, with the intraday low touching USD 2147.03 per ounce. In early Asian trading on Wednesday, spot gold traded narrowly, currently hovering around USD 2157.80 per ounce.

According to the U.S. Census Bureau, single-family housing starts, which make up the core of residential construction, surged by 11.6% month-over-month in February, seasonally adjusted to an annual rate of 1.129 million units, the highest since April 2022.

The dollar rose by 0.2%, briefly touching a high of 104.06 earlier in the session, making gold more expensive for overseas buyers.

Although the market widely expects the Federal Reserve to maintain interest rates unchanged tonight, market participants are awaiting comments from Fed Chair Powell after the meeting to understand the Fed’s latest rate expectations.

Gold initially opened with a brief uptick to around USD 2157, then retreated to around USD 2146 with brief fluctuations before rebounding in the afternoon Asian session.

Gold rose alongside the late U.S. session to yesterday’s high of USD 2163, then moderated slightly before consolidating at the high levels during the U.S. session, closing at USD 2160.

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 2170-2178.
  • Key support levels to watch in the short term are around 2140-2130.

WTI Crude Oil >>

On Tuesday, oil prices rose for the second consecutive trading day to multi-month highs as Ukraine escalated attacks on Russian oil refineries.

The April contract for U.S. crude oil futures rose by USD 0.75, or 0.9%, to close at USD 83.47 per barrel, while Brent crude oil futures gained 0.6% to settle at USD 87.38 per barrel.

Ukraine has intensified its attacks on Russian oil infrastructure this year, with at least seven refineries becoming targets of drone attacks this month alone. These attacks have resulted in a 7% shutdown of Russia’s refining capacity, equivalent to approximately 370,500 barrels per day.

According to Hodes’ calculations, attacks on Russian refineries could lead to a global oil supply reduction of around 350,000 barrels per day and increase U.S. crude oil prices by USD 3 per barrel. Crude oil prices continued their upward trend on the daily chart, maintaining strength after breaking through previous highs.

Following a brief period of consolidation with a doji candlestick pattern last Friday, this week opened with weakness but remained stable above the breakout point of USD 80.50. During the U.S. session, prices surged to a new high of USD 82.50 and closed near the highs.

The daily chart shows two consecutive bullish candles sandwiching the doji candlestick, indicating a continuation of the uptrend. On the 4-hour chart, prices rallied strongly around the middle band, with yesterday’s consolidation above the USD 81.0 level replacing the retracement.

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 84.5-85.0.
  • Key support levels to monitor in the short term are around 82.5-82.0.

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