Gold Rebounds as Dollar Declines, Oil Prices Fall Nearly 1%

Benefiting from the decline in the U.S. dollar and U.S. Treasury yields, as well as Powell continuing to tightly shut the door on interest rate hikes, the price of gold rebounded by nearly 1%, briefly approaching the USD 2,360 mark.

Due to heightened market concerns that the Federal Reserve might continue to maintain high interest rates to combat inflation, oil prices retreated, dropping by nearly 1%.

Gold >>

On Tuesday, benefiting from the decline in the U.S. dollar and U.S. Treasury yields, as well as Powell continuing to tightly shut the door on interest rate hikes, spot gold rebounded, briefly approaching the USD 2,360 mark, and ultimately closed up 0.93% at USD 2,344.60 per ounce.

Data released on Tuesday showed that the annual U.S. core CPI rate was 2.4%, meeting expectations and unchanged from the previous value. The annual PPI rate for April was 2.20%, also meeting expectations and higher than the previous value.

However, the core PPI monthly rate recorded 0.50%, significantly exceeding expectations and the previous value (both at 0.2%). After the PPI data was released, the U.S. dollar index briefly surged about 30 points, reaching a high of 105.4796, but has since given back some of its gains, currently standing at 105.1652.

Spot gold briefly fell by USD 7, hitting a low of USD 2,337.04, but recovered some of the losses, returning to above the USD 2,340 mark, closing at USD 2,344.60 per ounce. Yesterday, the technical aspect of gold saw a bottoming out and rising in a volatile trading session, closing higher.

During the Asian and European sessions, the price slightly rebounded but faced resistance at the USD 2,345 mark and quickly fell back. In the afternoon, it further retreated to USD 2,336 before stabilizing and rebounding.

In the evening U.S. session, under the bearish influence of the PPI data, gold prices quickly dropped to the USD 2,336 level before rebounding again, and later in the U.S. session, it surged past the USD 2,350 mark, continuing to strengthen. Finally, it closed at around USD 2,355 in a volatile upward trend.

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 2370-2375.
  • Key support levels to watch in the short term are around 2345-2340.

WTI Crude Oil >>

On Tuesday, oil prices retreated due to heightened market concerns that the Federal Reserve might continue to maintain high interest rates to combat inflation.

WTI crude oil briefly fell to an intraday low of USD 77.27 but recovered some losses by the end of the session, ultimately closing down 0.88% at USD 78.04 per barrel. Brent crude oil closed down 0.87% at USD 82.45 per barrel.

On Tuesday evening, OPEC maintained its forecast for relatively strong global oil demand growth in 2024 and indicated that this year’s global economic performance could be better than expected.

The price fluctuations of WTI and Brent crude oil reflected the market’s sensitive reactions to supply and demand dynamics. The market will closely monitor OPEC+ production policy meetings and further developments in global economic activity.

Yesterday, from a technical perspective, oil prices experienced a suppressed decline and downward adjustment amid volatile trading. During the Asian and European sessions, the price slightly rebounded but faced resistance at the USD 79.3 mark, continuously falling back.

In the evening U.S. session, it further declined, breaking through the USD 78 level to stabilize near USD 77.7 before rebounding. By 11 PM, it attempted another rise but faced resistance at the USD 78.9 level, leading to another downward pressure and a weak close.

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 80.0-80.6.
  • Key support levels to monitor in the short term are around 77.0-77.8.

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