Gold rebounded from its lows to close higher, while crude oil climbed approximately 2% to a four-month high

Due to stronger-than-expected inflation and other data in the United States last week, market expectations for a rate cut by the Federal Reserve in June cooled further.

As a result, the US dollar and Treasury yields continued to rebound, while gold briefly fell to a one-week low before bouncing back and closing higher.

Crude oil climbed about 2% to a four-month high, as crude exports from Iraq and Saudi Arabia decreased, and there were signs indicating stronger demand and economic growth in China and the United States.

Gold >>

On Monday, after dropping to a one-week low, the price of gold rebounded, with spot gold initially touching its lowest level since March 7th before bouncing back to close at USD 2160.15 per ounce, up approximately 0.2%.

In early Asian trading on Tuesday, spot gold experienced narrow fluctuations, currently trading at USD 2162.23 per ounce.

Last week, stronger-than-expected US inflation and other data cooled market expectations for a Fed rate cut in June, leading to a continuous rebound in the US dollar and Treasury yields. On Monday, gold extended its decline intraday, hitting a one-and-a-half-week low of USD 2145.99 before rebounding.

However, speculation about the Fed easing monetary policy earlier than expected continued to support gold prices. Investors are awaiting a series of central bank meetings this week, including the Fed’s policy decision on Wednesday, to look for clues on inflation and interest rates.

Gold has tested the support near USD 2150 multiple times in recent days, experiencing false breakthroughs where it briefly fell below USD 2146.

Subsequently, it oscillated at the lows before rebounding, returning to the USD 2160 level. This rollercoaster reversal trend completely erased all intraday losses and closed positively.

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 2170-2178.
  • Key support levels to watch in the short term are around 2140-2130.

WTI Crude Oil >>

On Monday, oil prices climbed approximately 2% to a four-month high due to reduced crude oil exports from Iraq and Saudi Arabia, as well as signs indicating stronger demand and economic growth in China and the United States.

By the close of trading, US crude oil futures rose by USD 1.68, or 2.2%, to settle at USD 82.81 per barrel, while Brent crude futures increased by USD 1.55, or 1.8%, to USD 86.89 per barrel. In early Asian trading on Tuesday, US crude oil traded narrowly near USD 82.73 per barrel.

On the supply side, Iraq, one of OPEC’s two largest oil-producing countries, stated that it would reduce crude oil exports to 3.3 million barrels per day in the coming months to offset the portion of exports exceeding OPEC+ quotas since January, which would result in a reduction of Iraqi crude oil exports by 130,000 barrels per day compared to last month.

Meanwhile, Saudi Arabia, OPEC’s largest oil-producing country, saw its crude oil exports decrease for the second consecutive month, dropping from 6.308 million barrels per day in December to 6.297 million barrels per day in January.

On the demand side, both factory output and retail sales in China, the world’s largest oil importer, outperformed expectations in January and February, signaling a steady start to the Chinese economy in 2024.

Additionally, US Energy Secretary Jennifer Granholm stated that crude oil inventories in the Strategic Petroleum Reserve (SPR) are expected to reach or exceed levels before the massive sales two years ago, which is anticipated to boost oil demand.

After opening, crude oil continued to oscillate with a bullish bias. During the European session, it briefly surged near USD 81.60, and although there were subsequent adjustments, the renewed upward movement during the day further confirmed the dominance of the bullish trend in the current market.

Therefore, even with adjustments, they could be seen as routine technical corrections.

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 82.0-82.5.
  • Key support levels to monitor in the short term are around 80.0-79.5.

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