Gold Hits Six Consecutive Lows, Oil Prices Drop Over 2%

Gold prices have fallen for six consecutive sessions to reach a nearly seven-month low, dragged down by the prospect of a stronger U.S. dollar and rising U.S. interest rates. Meanwhile, oil prices have dropped over 2% to a three-week low, with the market closely watching the OPEC+ meeting.

Gold >>

On Monday, pressured by a strengthening U.S. dollar and the prospect of rising U.S. interest rates, spot gold extended its decline for the sixth consecutive trading day, breaking below $1,830 per ounce to reach its lowest level since March 10th.

Intra-day, it dropped over $20 and eventually closed down 1.11% at $1,827.88 per ounce. During the early Asian market trading on Tuesday, spot gold continued its downward trend, briefly touching a near-seven-month low of $1,821.76 per ounce, further approaching the support around the February 28th low of $1,804.73.

The surge in U.S. bond yields and the stronger U.S. dollar have been the primary factors weighing on gold. Faced with rising interest rates and continually increasing bond yields, investors have sought safer havens, and suddenly, fixed-income assets have become more attractive, impacting the short-term outlook for gold.

From a technical perspective, gold has experienced an overall bearish trend, opening lower and continuing a strong one-sided downward movement. It reached its daily high around $1,848 during the Asian-European session but then declined during the afternoon European session and subsequent late U.S. session, breaking below the $1,830 level and maintaining its weakness.

In the early morning hours, gold prices accelerated downward, breaking through the $1,827 level, ultimately closing with a bearish tone.

Technical Analysis:

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

  • Key resistance levels to watch in the short term are around 1840-1835.
  • Key support levels to watch in the short term are around 1810-1805.

WTI Crude Oil >>

The continuous strength of the U.S. dollar, profit-taking by investors, and concerns in the market about increased supply and high-interest rates dampening demand have led to a three-day decline in crude oil prices to a three-week low.

During the U.S. session, U.S. crude oil saw a further short-term decline, ultimately closing down 2.32% at $88.61 per barrel, while Brent crude oil closed down 1.8% at $90.41 per barrel.

The price spread between U.S. crude oil and Brent crude oil, the two major benchmark crude oils, is rapidly narrowing. This could potentially result in reduced U.S. oil exports, increased inventories, and possibly even further declines in oil prices.

Analysts note that after a nearly 30% increase in oil prices in the third quarter to a ten-month high, some traders have been taking profits. The global outlook is deteriorating rapidly, with rising bond yields once again driving dollar trading and weighing on the prospects for oil demand.

Major oil-producing nations are set to hold a committee meeting later this week, with market expectations that Saudi Arabia and Russia will voluntarily extend production cuts through the end of this year.

From a technical perspective, crude oil experienced a slight upward move but faced pressure, leading to a downward trend with volatility.

During the Asian-European session, it rebounded slightly around the $90.6 level but then accelerated higher in the afternoon, breaking through the $91.8 level before encountering resistance and pulling back.

In the late U.S. session, oil prices accelerated downward, breaking below the $90 level and maintaining a very weak downward trend to close below previous lows.

Technical Analysis:

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

  • Key resistance levels to monitor in the short term are around 90.0-91.0.
  • Key support levels to monitor in the short term are around 87.0-86.0.

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