The United States Sees Major Drop in January Retail Sales, Gold Rebounds, Oil Prices Rise Nearly 2%

Dragged down by U.S. retail sales data, the U.S. dollar and Treasury yields declined, prompting a rebound in gold, which closed up by 0.6%.

Oil prices also rose by nearly 2% on a boost, but the International Energy Agency (IEA) stated that global oil demand would slow down, limiting the upside potential for oil prices.

Gold >>

On Thursday, gold rose by 0.6%, closing at USD 2004.18 per ounce, as weak U.S. retail sales for January, the largest decline in 10 months, pushed the dollar and Treasury yields lower, providing a rebound opportunity for gold prices.

Additionally, after regaining the 100-day moving average on Wednesday, gold attracted buying interest on dips.

Economic data released on Thursday showed that U.S. retail sales for January fell by 0.8% month-on-month, marking the largest decline since March 2023 and significantly higher than the expected 0.1% decline.

Furthermore, the Labor Department reported a decrease of 8,000 in initial jobless claims last week, adjusted seasonally to 212,000.

Following the data release, the U.S. dollar index extended its decline, with the benchmark 10-year Treasury yield slipping, making non-yielding gold more attractive to overseas buyers.

Technically, gold stabilized around the USD 1990 level and saw a strong rebound as bulls shook off volatility.

During the Asian-European sessions, prices stabilized and rebounded slightly around the USD 1990 level, with further upward movement in the afternoon testing the strong resistance at the USD 2000 integer level.

In the late U.S. session, boosted by positive retail data, gold quickly rebounded from its lows and once again surged past the USD 2008 level to close strongly.

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 2012-2015.
  • Key support levels to watch in the short term are around 1993-1990.

WTI Crude Oil >>

On Thursday, oil prices rose by nearly 2%, with Brent crude futures closing up USD 1.26, or 1.5%, at USD 82.86 per barrel. U.S. crude oil rose by USD 1.39, or 1.8%, to USD 78.03 per barrel.

The larger-than-expected decline in U.S. retail sales for January led to a 0.43% drop in the U.S. dollar index on Thursday, boosting oil prices as the dollar weakened.

However, the International Energy Agency (IEA) stated on Thursday that global oil demand growth is losing momentum, with demand growth expected to slow to 1.22 million barrels per day by 2024, about half of last year’s increase. This limited further upside for oil prices.

Technically, oil prices saw strong bottoming and rebounding during volatile trading. During the Asian-European sessions, there was a slight retracement and stabilization around the USD 75.8 level, followed by bullish rebounding.

In the afternoon, prices further climbed above the USD 76.5 level, continuing the rebound. In the late U.S. session, bullish momentum accelerated, pushing prices back above the USD 77 and USD 78 levels, closing at the USD 78 level.

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 79.5-80.0.
  • Key support levels to monitor in the short term are around 77.0-76.5.

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