Gold
On Wednesday, Federal Reserve Chairman Jerome Powell hinted that if inflation meets expectations, a rate cut could come as early as September. This, along with a sharp drop in the dollar and US Treasury yields, boosted safe-haven demand for gold amid escalating geopolitical tensions.
Gold prices soared nearly $40, climbing over 5% in July, marking the largest monthly gain since March. Spot gold continued its upward momentum, gaining over 1% and approaching the $2450 mark, but eventually closed up 1.53% at $2447.75 per ounce.
Powell’s remarks during a press conference following the Fed’s decision to keep the benchmark rate unchanged sparked investor hopes for a September rate cut. The dollar index fell 0.4% to 104.05, and the 10-year US Treasury yield dropped 2.61%, marking its fifth consecutive day of decline.
The assassination of Hamas leader Ismail Haniyeh in Iran heightened Middle East tensions, further supporting safe-haven assets. Investors should watch for further market reactions to the Fed’s decision, geopolitical developments, the US July ISM Manufacturing PMI, and initial jobless claims data.
Gold Technical Analysis:
On Wednesday, gold experienced strong bullish momentum. After stabilizing at the $2404 level in the Asian and European sessions, prices surged to $2420.
In the US session, gold briefly spiked above $2428 before consolidating. Following Powell’s announcement, gold prices broke through the $2430 and $2440 levels, closing near $2450.
Today’s Focus:
- Short-term strategy: Favor buying on dips and shorting on rebounds.
- Resistance: $2455-$2460
- Support: $2435-$2430
Oil
On Wednesday, oil prices rebounded nearly 5% from a two-month low as the assassination of a Hamas leader in Iran sparked fears of escalating Middle East conflict. This, coupled with a significant drop in US crude inventories and a sharp decline in the dollar, provided strong upward momentum for oil prices.
WTI crude surged over 4%, breaking above $78 and closing up 4.28% at $78.04 per barrel. Brent crude regained the $80 level, closing up 3.82% at $81.43 per barrel.
US crude inventories fell by 3.4 million barrels last week, significantly more than the 1.1 million barrel drop expected by analysts polled by Reuters. This marks the fifth consecutive week of inventory declines, the longest streak since January 2021. The assassination of Ismail Haniyeh and a 0.4% drop in the dollar index also supported oil prices.
The Fed’s decision to keep rates unchanged while leaving the door open for a potential rate cut in September further fueled the rally. The OPEC+ Joint Ministerial Monitoring Committee (JMMC) is set to meet on Thursday, where it is expected to maintain current production policies and begin phasing out some cuts starting in October.
Oil Technical Analysis:
On Wednesday, oil prices stabilized at the $75 level before embarking on a strong upward trend. Prices broke above the previous day’s resistance at $76, continuing to rise above $77. In the US session, oil briefly pulled back from $77.5 before surging again to close above $78.
Today’s Focus:
- Short-term strategy: Favor buying on dips and shorting on rebounds.
- Resistance: $79.5-$80.0
- Support: $77.5-$77.0
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Disclaimer
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