Gold and Oil Prices Edge Lower Slightly, Market Focus on This Week’s Nonfarm Data

The price of gold weakened slightly as the Federal Reserve maintained interest rates unchanged and indicated a continued inclination towards eventual rate cuts, briefly helping gold prices rise to around 2328.

However, strong initial jobless claims data shifted market focus back to the possibility of the U.S. interest rates staying at higher levels for a longer period. Gold prices dropped to around 2285.

Affected by weak global demand, increasing inventories, and diminishing hopes for rapid interest rate cuts in the United States, oil prices declined.

However, OPEC+ might extend oil production cuts, providing some support to oil prices. Oil prices closed near seven-week lows, with mixed fluctuations. Currently, investors’ attention turns to U.S. nonfarm payroll data.

Gold >>

On Thursday, the Federal Reserve kept interest rates unchanged and indicated a continued inclination towards eventual rate cuts, briefly helping gold prices rise to near 2328.

However, strong initial jobless claims data shifted market focus back to the possibility of U.S. interest rates staying at higher levels for a longer period, causing gold prices to drop to around 2285. Ultimately, spot gold oscillated lower, briefly falling below the 2290 level, closing down 0.73% at USD 2302.70 per ounce.

Last week, initial jobless claims in the United States remained stable at a low level, indicating that the labor market remains quite tight and should continue to support the economy in the second quarter.

Economists largely disregarded data showing nearly stagnant worker productivity growth in the first quarter, pointing out that productivity trends remain robust. They also believed that first-quarter GDP and productivity are often lower due to seasonal distortions.

Superficially, the sharp slowdown in productivity growth accompanied by a rapid increase in labor costs might raise concerns about increasing inflationary pressure and squeezing profit margins, thereby affecting demand for labor.

Gold prices experienced a wide-ranging technical roller-coaster ride yesterday, with prices under pressure during the Asian and European sessions, retreating from the 2326 level and oscillating downward.

In the afternoon, prices further declined, breaking through the previous day’s early low of 2307 and continuing downward through the 2300 integer level, weakening again.

In the evening U.S. session, affected by bearish sentiment from initial jobless claims, gold prices faced resistance around the 2304 level and retreated again, breaking below the bottom. Eventually, gold prices accelerated downward to near the 2285 level, rebounding to the 2300 integer level and closing with oscillations.

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 2315-2318.
  • Key support levels to watch in the short term are around 2285-2287.

WTI Crude Oil >>

On Thursday, gold prices fell, affected by weak global demand, increasing inventories, and diminishing hopes for rapid interest rate cuts in the United States. However, OPEC+ might extend oil production cuts, providing some support to oil prices.

Oil prices fluctuated, closing near seven-week lows. WTI crude oil ultimately closed down 0.04% at USD 79.02 per barrel, while Brent crude oil closed up 0.13% at USD 83.66 per barrel. Recent fundamental news has led to three consecutive days of sharp declines in oil prices.

More diplomatic efforts are underway in Gaza to broker a ceasefire, which would ease tensions in the region. Additionally, the U.S. Energy Information Administration (EIA) reported on Wednesday that crude oil inventories saw one of the largest increases in a long time, exacerbating concerns about weak demand.

However, three sources from OPEC+ mentioned that if demand fails to rebound, the organization may extend production cuts, which supports oil prices. Yesterday, oil prices saw minor bottoming and recovery in technical trading amid volatility.

Prices were weakly consolidating below the 79.9 level during the Asian and European sessions, with a slight downward movement in the late U.S. session, piercing through the 78.4 level before rebounding.

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 80.5-80.7.
  • Key support levels to monitor in the short term are around 81.5.

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