Escalating Safe-Haven Sentiment Supports Gold Prices, Demand Concerns Lead to Over 3% Drop in Oil Prices

Despite the decline in U.S. bond yields, gold prices continue to fluctuate around USD 2030 per ounce, restrained by the strengthening U.S. dollar.

Concerns over market demand ignited as Saudi Arabia lowered its selling price, leading to a double decline in international oil prices, with U.S. crude falling more than 4%.

Gold >>

On Tuesday, U.S. economic data indicated improved confidence among small businesses and a narrowing trade deficit, impacting the dynamics of gold. The market awaits U.S. CPI data to seek further direction, and the price of gold may be influenced by inflation expectations.

Spot gold closed up 0.11%, settling at USD 2030.23 per ounce. Gold futures, however, fell 0.02%, closing at USD 2033 per ounce. Despite the decline in U.S. bond yields, gold prices continue to fluctuate around USD 2030 per ounce, restrained by the strengthening U.S. dollar.

Amidst risk aversion and a broadly strengthening U.S. dollar, gold prices continued to rise by more than 0.15% during the North American session on Tuesday. On the technical front, gold experienced highs during volatile trading, breaking through the resistance at USD 2041 and subsequently pulling back.

During the Asia-Europe session, prices fluctuated and rebounded slightly around the USD 2030 level, recovering after the initial decline.

In the afternoon, there was a slow climb with a minor increase, ultimately accelerating during the late U.S. session to break through the USD 2041 level, facing pressure, and closing with a pullback, breaking the bottom in a range-bound manner.

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 2045-2050.
  • Key support levels to watch in the short term are around 2025-2020.

WTI Crude Oil >>

On Tuesday, international crude oil prices fell by over 3% due to significant price cuts by Saudi Arabia, the largest exporter, and increased OPEC production, offsetting concerns about the supply disruptions from the escalating geopolitical tensions in the Middle East.

U.S. crude oil closed at USD 70.77 per barrel, down 4.12% or USD 3.04 per barrel, with an intraday low of USD 70.12 per barrel. Brent crude reported USD 76.12 per barrel, down 3.35% or USD 2.64 per barrel.

Saudi Aramco, the national oil company of Saudi Arabia, announced a reduction in the flagship crude oil prices for February to all buyers worldwide. The selling price of the flagship Arab Light crude oil to Asia was reduced by USD 2 per barrel.

Additionally, Saudi Aramco lowered crude oil prices for February. These measures reignited concerns about oversupply in the oil market, overshadowing the positive factors from shipping companies avoiding the Red Sea route.

On the technical front, oil prices stabilized around the USD 70.5 level, witnessing a strong one-sided upward movement. During the late European and American trading sessions, there was an accelerated rally, breaking through and holding above the USD 72 level, continuing the bullish rebound.

Eventually, during the late U.S. session, there was a rapid surge, breaking through the USD 72.9 level but facing resistance, followed by a pullback to retest the USD 71.4 level before closing with volatile oscillations.

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 73.5-74.5.
  • Key support levels to monitor in the short term are around 70.5-69.5.

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