Gold Surges USD 30 Intraday, Weak Demand Drags Oil Prices from Gains to Losses

The market’s anticipation of a June interest rate cut by the Federal Reserve grew, leading to a surge in gold prices to a three-month high of USD 2119.79 per ounce, with an increase of approximately USD 30 within the day.

The decision by OPEC+ oil-producing nations to extend their voluntary production cut plan until mid-year initially pushed oil prices up by nearly 1%. However, subsequent concerns regarding demand overshadowed the market, causing oil prices to reverse their gains and decline.

Gold >>

On Monday, the market’s bet on a June interest rate cut by the Federal Reserve increased, leading spot gold to surpass USD 2115 per ounce, marking a new high since December 2023, with a daily surge of around USD 30 and eventually closing up 1.58% at USD 2115.82 per ounce.

COMEX April gold futures also closed up 1.46% at USD 2126.3 per ounce. Given the current market sentiment, gold prices are expected to further rise. This week, all eyes will be on Federal Reserve Chairman Powell’s two-day semi-annual monetary policy report testimony before Congress.

Additionally, the US non-farm payrolls report will also be a focal point for the market, especially following a series of disappointing economic data released last week.

From the current market outlook, gold prices have broken through the resistance level of 2088-2100, and the short-term upward trend continues regardless of the timeframe.

Both small and large cycles indicate a bullish trend formation and continuation, with the market expected to move towards levels above the historical high of 2144.

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 2120-2125.
  • Key support levels to watch in the short term are around 2100-2095.

WTI Crude Oil >>

On Monday, as expected, OPEC+ extended voluntary production cuts until mid-year, causing oil prices to initially rise by nearly 1%. However, subsequent concerns over demand weighed on the market, leading to a reversal in oil prices.

WTI crude oil maintained range-bound fluctuations during the Asian and European sessions, failing to breach the USD 80 per barrel level twice. During the US session, it continued to decline, ultimately closing down 1.38% at USD 78.86 per barrel; Brent crude oil barely closed up 0.05% at USD 83.62 per barrel.

For oil prices in March, a slight upward movement compared to February is expected, but excessive optimism is not advisable, as sluggish demand for refined oil products will continue to constrain upward pressure on oil prices.

Although there has been a slight improvement in refined oil consumption in the European region, it is not sufficient to reverse the overall sluggish consumption trend. Whether the Chinese and American markets can fulfill the expectations of improved demand will also play a crucial role in the market.

Additionally, geopolitical factors continue to introduce uncertainty regarding the supply side of the oil market. After experiencing a significant decline in daily trends, crude oil prices have essentially reached the support zone near the previous daily levels.

However, in the four-hour trend, prices have been maintaining narrow fluctuations at low levels. Candlesticks continue to be under pressure from short-term moving averages, indicating a relatively weak trend, suggesting the possibility of further adjustment in the short-term trend.

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 80.3-80.8.
  • Key support levels to monitor in the short term are around 77.0-76.5.

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