Gold Price Breaks Through USD 2035 Mark, Oil Price Falls by About 2%

The weakening of the US dollar boosted the gold price, while the safe-haven demand spurred by the tense situation in the Middle East also supported the gold price, which rose more than USD 20 last week.

Federal Reserve policymakers indicated that a rate cut might be delayed for at least another two months, and progress was made in the Israeli-Palestinian ceasefire agreement, causing oil prices to fall by about 2% on Friday.

Gold >>

Last Friday, gold prices plummeted during the trading session, approaching the 2015 mark at one point. However, they later recovered significantly due to the weakness of the US dollar and the escalation of risk aversion stemming from the heightened tensions in the Middle East.

Gold prices regained all lost ground and broke through the 2035 mark, with spot gold ultimately closing up 0.55% at USD 2035.56 per ounce; COMEX gold futures also closed up 0.74% at USD 2045.8 per ounce.

The recent rise in gold prices is primarily driven by the weakness of the US dollar and the escalating tensions in the Middle East, which reinforce gold’s status as the preferred safe-haven asset.

The US dollar index recorded its first weekly decline in nearly two months, and US Treasury yields also fell, making gold priced in US dollars more affordable for overseas buyers.

Additionally, considering that the recent geopolitical tensions may persist for a longer period, the safe-haven nature of gold becomes more attractive to investors during times of economic and geopolitical uncertainty.

From a technical perspective, gold prices weakened during the Asia-Europe session, testing the 2027 mark before adjusting downwards. In the afternoon, prices further declined, breaking through the 2020 mark and stabilizing near 2015 before rebounding.

In the late US session, there was a sharp V-shaped rebound, breaking through the morning’s opening decline at the 2027 level and continuing to strengthen. Overnight, gold prices accelerated their rise, breaking through the 2041 mark before a slight pullback and closing strongly.

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 2048-2053.
  • Key support levels to watch in the short term are around 2025-2020.

WTI Crude Oil >>

Last Friday, Federal Reserve policymakers indicated that a rate cut might be delayed for at least another two months, and progress was made in the Israeli-Palestinian ceasefire agreement. WTI crude oil fell by 2.24% to USD 76.8 per barrel, while Brent crude oil fell by 2% to USD 81.92 per barrel.

Signs of global supply tightening due to geopolitical risks in the Middle East may continue to support oil prices. Meanwhile, the US Energy Information Administration reported a significant increase in US crude oil inventories of 3.514 million barrels, much lower than the previously expected 12 million barrels.

This is the second increase in inventories in two weeks, reaffirming expectations that demand from US refiners will improve after recent supply disruptions. Therefore, it is necessary to remain cautious before shorting oil.

From a technical perspective, crude oil faced downward pressure last Friday, encountering unilateral downward movement below the 78.5 mark, with continuous weak downward movement during the Asia-Europe-US sessions, breaking through the 77 mark and closing weakly.

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 77.7-78.2.
  • Key support levels to monitor in the short term are around 75.5-75.0.

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