Gold Price Surges Past 2030 Mark, Oil Price Falls by Over 1%

USD and US bond yields declined, boosting gold prices to their highest level in over a week, briefly touching the 2030 mark; concerns over global demand overshadowed the impact of geopolitical tensions, causing oil prices to drop by over 1%.

Market focus has shifted to the latest monetary policy meeting minutes from the Federal Reserve, in search of further clues regarding interest rate cuts.

Gold >>

On Tuesday, due to the decline in the US dollar and US bond yields, the price of gold climbed to its highest level in over a week.

Spot gold rose for the fourth consecutive trading day, briefly touching the 2030 mark, ultimately closing up 0.32% at USD 2024.32 per ounce; COMEX April gold futures rose 0.78% to USD 2039.8 per ounce.

Given that recent developments in geopolitical situations indicate tensions may persist for a longer period, gold is once again being influenced by safe-haven flows. Meanwhile, the 0.1% decline in the US dollar index makes dollar-priced gold more affordable for overseas buyers.

Currently, market focus turns to the Federal Reserve’s January policy meeting minutes set to be released on Wednesday, in search of more clues as to when the Fed might begin cutting interest rates.

According to the data from the Chicago Mercantile Exchange’s “FedWatch Tool,” the market currently predicts a 77% probability of a rate cut in June. Lower rates would help reduce the opportunity cost of holding gold.

On the technical side, gold stabilized above the 2015 level, experiencing bullish fluctuations upwards. During the Asian and European sessions, it continued to climb and break highs, with a rapid acceleration in the late US session pushing it above the 2030 mark before entering a sideways consolidation.

Overnight, the price of gold was suppressed, retracing to around 2023 before closing in a volatile 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 2030-2035.
  • Key support levels to watch in the short term are around 2015-2010.

WTI Crude Oil >>

On Tuesday, concerns about global demand outweighed the impact of geopolitical tensions, leading to a 1.33% decrease in WTI crude oil, closing at USD 77.11 per barrel, and a 1.03% decrease in Brent crude oil, closing at USD 82.46 per barrel.

Recent geopolitical disturbances have continued to disrupt the market, with investors showing increased concerns about the supply side, leading to a strengthening of the crude oil market’s contango structure.

However, despite the strength in crude oil, the recent decline in refined oil inventories in Europe and the United States has become a limiting factor in oil price performance due to the lack of demand highlights.

This means that there is a divergence between supply and demand in the crude oil market, making it easy for oil prices to fluctuate in such a context.

From a technical perspective, oil prices were suppressed below USD 78.5, leading to a wide-ranging consolidation between bulls and bears. During the Asian and European sessions, prices quickly fell, but they stabilized around the USD 77.3 level in the afternoon, experiencing a rapid rebound.

In the late US session, there was a second attempt to push prices higher, but they were quickly pushed back below the USD 78.3 level, ultimately breaking through the USD 77 level to reach around USD 76.8 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 78.3-78.8.
  • Key support levels to monitor in the short term are around 76.0-75.5.

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