Gold rebounds nearly 1%, crude oil falls again to refresh April lows

Due to the escalating tension in the Middle East, the allure of gold increased, with safe-haven gold rising by 0.74%. However, strong economic data from the United States has bolstered the prospects of fewer interest rate cuts, with some Federal Reserve officials even indicating an open attitude towards raising interest rates.

This still poses further downside risks for gold prices in the short term; investors are weighing mixed economic data from the United States, U.S. sanctions on Venezuela and Iran, as well as the easing of tensions in the Middle East. Consequently, oil prices continued their downward trend, hitting new lows for April.

Gold >>

On Thursday, the ongoing tension in the Middle East increased the attractiveness of gold, prompting a resurgence in spot gold prices. It reached a peak of 2392.67 during the trading session and ultimately closed up by 0.74% at 2378.97 US dollars per ounce.

However, strong economic data from the United States reinforced the prospect of fewer interest rate cuts, with some Federal Reserve officials even indicating an open attitude towards raising interest rates. This continues to expose gold prices to further downside risks in the short term.

Although the postponement of expectations for Fed rate cuts brought some downward pressure on gold prices, the sustained geopolitical tension in the Middle East provided solid support. With geopolitical concerns lingering, gold prices may continue to find safe-haven demand with each pullback.

The weekly initial jobless claims and housing data from the United States will also provide some incentive for gold traders on this trading day. If the recovery trend persists, gold prices may retest the key resistance level around USD 2400 per ounce this week.

Yesterday, the gold market opened at USD 2361.5 per ounce, retracing slightly to USD 2361 per ounce before gradually rallying. The daily high reached USD 2393 per ounce before pulling back from the peak.

The daily close settled at USD 2378.7 per ounce with a long upper shadow, forming a bullish candlestick pattern, indicating continuation of the consolidation phase for gold.

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 2395-2400.
  • Key support levels to watch in the short term are around 2365-2360.

WTI Crude Oil >>  

On Thursday, investors weighed mixed U.S. economic data, U.S. sanctions on Venezuela and Iran, and easing tensions in the Middle East, while oil prices continued their downward trend, hitting fresh lows for April.

WTI crude oil briefly fell below the USD 82 mark, ultimately closing down by 0.5% at USD 82.85 per barrel, while Brent crude oil fell by 0.6% to USD 86.86 per barrel.

The resilience of the U.S. labor market has propelled economic growth, coupled with rising inflation, leading financial markets and some economists to anticipate that the Federal Reserve may postpone interest rate cuts until September.

On the supply side, OPEC member Venezuela lost crucial permits from the U.S. to export oil to global markets, which will impact the quantity and quality of its crude oil and fuel sales. The U.S. also announced sanctions on another OPEC member, Iran.

Overall, while the geopolitical situation in the Middle East has temporarily not worsened further and the Fed’s rate cut expectations have been delayed, oil prices remain relatively weak in the short term, facing further downside risks.

The crude oil market opened yesterday at USD 82.77 per barrel, initially continuing its downward trend, with the daily low reaching USD 81.5 per barrel. Later in the U.S. trading session, there was a strong rally, with the daily high reaching USD 83.3 per barrel before consolidating and pulling back.

The daily close settled at USD 82.38 per barrel, forming a spindle-shaped candlestick pattern with a lower shadow longer than the upper shadow, indicating continued pressure on crude oil prices.

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 84.0-84.5.
  • Key support levels to monitor in the short term are around 81.5-81.0.

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While every effort has been made to ensure the accuracy of the information in this document, DOO Prime does not warrant or guarantee the accuracy, completeness or reliability of this information. DOO Prime does not accept responsibility for any losses or damages arising directly or indirectly, from the use of this document. The material contained in this document is provided solely for general information and educational purposes and is not and should not be construed as, an offer to buy or sell, or as a solicitation of an offer to buy or sell, securities, futures, options, bonds or any other relevant financial instruments or investments. Nothing in this document should be taken as making any recommendations or providing any investment or other advice with respect to the purchase, sale or other disposition of financial instruments, any related products or any other products, securities or investments. Trading involves risk and you are advised to exercise caution in relation to the report. Before making any investment decision, prospective investors should seek advice from their own financial advisers, take into account their individual financial needs and circumstances and carefully consider the risks associated with such investment decision.

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