U.S. Labor Market Slows, Gold and Crude Oil Simultaneously Decline

The U.S. labor market has further slowed down, with the 10-year U.S. Treasury yield hitting a three-month low. The attractiveness of the U.S. dollar continues to rise, causing a decline in gold prices approaching the USD 2000 mark.

The OPEC+ meeting has yielded unsatisfactory results, and due to concerns about oversupply, oil prices have experienced four consecutive declines, reaching a five-month low.

Gold >>

On Tuesday, spot gold touched a low of USD 2009.80 per ounce, closing at USD 2019.22 per ounce, down by 0.49%. Gold futures also fell by 0.29%, settling at USD 2036.30 per ounce.

The further slowdown of the U.S. labor market has intensified speculation that the Federal Reserve will be able to cut interest rates next year to prevent an economic recession, leading to a recovery in U.S. Treasury yields.

The market’s expectation of the delayed contract for the outcome of the Federal Reserve meeting has slightly increased the anticipated level of accommodation by the end of 2024, with the effective federal funds rate expected to fall to around 4.05%.

In early Wednesday Asian trading, gold prices lost momentum. The recovery in demand for the U.S. dollar weighed on gold.

At the same time, the U.S. Dollar Index, measuring the dollar against a basket of U.S. trading partners, rebounded to 104.00. U.S. Treasury yields edged slightly higher, with the 10-year yield falling to 4.16%. Currently, gold is trading around USD 2020.

On the technical side, gold remained under pressure below USD 2041 throughout the day, showing weak and oscillating downward movement, breaking below and closing below the bottom.

In the Asian and European sessions, prices rebounded twice, testing resistance at USD 2041 and weakening.

In the late U.S. session, there was a rapid downward pullback before breaking through USD 2021, oscillating and rebounding in the late U.S. session, facing resistance at USD 2030 and experiencing accelerated downward movement, ultimately extending the weak downward trend to around USD 2009 before a weak closing rebound.

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 2030-2035.
  • Key support levels to watch in the short term are around 2005-2000.

WTI Crude Oil >>

On Tuesday, WTI crude oil futures closed down by USD 0.72 per barrel, a decrease of 1.0%, settling at USD 72.32 per barrel. Brent crude oil futures closed at USD 77.20 per barrel, down by USD 0.83 per barrel, a decline of 1.06%.

After the dust settled from the OPEC+ meeting, the results were unsatisfactory. Concerns about production cuts and escalating worries about demand led to oil prices falling for the fourth consecutive day.

Intraday, prices hit a five-month low of USD 72.01, marking the lowest closing price for both crude oil benchmarks since July 6. For WTI, this is the first time experiencing a four-day consecutive decline since May.

This situation is attributed to near-record-high U.S. oil exports and a historic peak in domestic crude oil production, overshadowing Saudi Arabia’s commitment to OPEC+ production cut plans.

On the technical side, oil prices continued to rise initially and then fall. During the Asian and European sessions, prices rebounded first, stabilizing around the USD 72 mark, then experienced a slight afternoon rally but quickly fell, encountering resistance at the USD 74 mark.

In the late U.S. session, there was an accelerated downward movement, breaking through the USD 73 mark and reaching around USD 72.1. The weak rebound encountered a second resistance below the USD 74 mark, leading to a bearish downward trend and closing below the previous low.

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 73.0-74.0.
  • Key support levels to monitor in the short term are around 71.0-70.0.

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