Gold Falls to Three-Week Low, Crude Oil Rises to 10-Month High

Due to market expectations of a slight uptick in inflation data this week, the US dollar experienced a modest rebound, leading to gold’s shaky decline and touching a three-week low.

The OPEC Monthly Report and the International Energy Agency (IEA) report provided support for oil prices, driving crude oil up by over 1%, reaching a 10-month high.

Gold >>

Gold prices fell below the $1920 mark yesterday, briefly touching a three-week low of $1907.63 during the early U.S. session before recovering some lost ground.

Ultimately, gold closed down 0.45% at $1913.80 per ounce due to market expectations of a slight uptick in the U.S. core inflation rate for August, which helped the U.S. dollar make a modest rebound and exerted pressure on gold.

Gold prices are currently awaiting the release of the U.S. Consumer Price Index (CPI) data for new directional cues. This week’s U.S. inflation data could provide the latest clues about the trajectory of U.S. interest rates following the Federal Reserve’s policy meeting next week.

If the CPI data comes in lower than market expectations, gold prices may rise, as signs of slowing inflation would reinforce arguments for the Fed to conclude rate hikes by the end of 2023.

On the other hand, if inflation data exceeds market expectations, gold prices could decline, as expectations for the Fed having room for rate hikes this year would increase.

From a technical standpoint, gold faced resistance around the $1924 level, leading to a one-sided downward trend. During the Asia-Europe session, there was a slight rebound that briefly broke through the $1924 level but quickly reversed, and in the afternoon, there was an accelerated decline below the $1915 level.

In the late U.S. session, gold continued to weaken, dropping to around $1907 before stabilizing and closing on a weak note.

Technical Analysis:

Today’s short-term trading strategy for gold suggests a focus on short positions on rebounds, with long positions considered as a secondary option during pullbacks.

  • 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 >>

Yesterday, crude oil continued its upward trend, surging by over 1% to reach a 10-month high. WTI crude oil briefly surged by more than 2% during the session, reaching an intraday high of $89.33, and ultimately closed up by 1.73% at $88.74 per barrel.

The rise in oil prices was driven by the release of the OPEC monthly report and a report from the International Energy Agency (IEA), which provided ongoing support to oil prices.

Supply restrictions from Saudi Arabia and Russia continued to have a bullish impact on oil prices. However, the current market conditions show signs of being overbought, suggesting that the upward momentum in oil prices may soon plateau.

From a technical perspective, oil prices maintained a strong upward trajectory, breaking through previous resistance levels around the $87 mark.

During the Asian, European, and American trading sessions, prices consistently pushed higher, surpassing previous highs. Ultimately, in the late American session after 21:00 UTC, oil prices accelerated their upward movement, breaching the $89 mark and reaching around $89.30 before closing strongly.

Technical Analysis:

Today’s short-term trading strategy for crude oil suggests a preference for buying on dips as the primary approach, with selling on rebounds seen as secondary.

  • Key resistance levels to monitor in the short term are around 89.5-90.
  • Key support levels to monitor in the short term are around 87-87.5.

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