Despite increasing bets on a US rate cut in September and heightened Middle East geopolitical tensions providing support, gold prices were held back on Wednesday due to a stronger dollar and rising Treasury yields, dropping around 0.29%.
Conversely, oil prices jumped over 3% on Wednesday, rebounding from multi-month lows as US crude inventory declines exceeded expectations, despite lingering concerns over weak oil demand from major Asian economies.
Gold
On Wednesday, despite support from expectations of a US rate cut in September and escalating Middle East geopolitical tensions, gold prices were pressured by a stronger dollar and rising Treasury yields, falling around 0.29%.
Spot gold briefly broke above the $2,400 level before the US market opened but reversed its gains, ultimately closing down 0.29% at $2,382.76 per ounce.
The US Dollar Index rose 0.2% on Wednesday, with the 10-year Treasury yield also climbing, putting pressure on gold. Additionally, official data showed that China’s central bank did not increase its gold reserves for the third consecutive month in July, slightly dampening bullish sentiment.
US stocks closed lower, with tech stocks dragging down the Nasdaq index by over 1%, further driving demand for cash and leading to a sell-off in gold.
Today’s focus will be on the US initial jobless claims data and Federal Reserve officials’ speeches.
Gold Technical Analysis:
Yesterday’s technical analysis of gold showed initial support at the $2,380 level, followed by a rebound. During the US trading session, gold prices surged past the $2,400 mark to reach $2,406 before pulling back. By 11 PM, gold had fallen below $2,406, continuing its decline to close around $2,384.
Today’s Focus:
For short-term trading, the suggested strategy is to sell on rebounds and buy on dips.
- Resistance: $2,399-$2,404
- Support: $2,369-$2,364
Oil
On Wednesday, despite ongoing concerns over weak oil demand from major Asian economies, US crude inventories dropped more than expected, causing oil prices to surge over 3%, rebounding from multi-month lows.
WTI crude rose more than 3% during the day, briefly surpassing $75 but closing at $74.63 per barrel, up 3.05%. Brent crude closed up 2.66% at $78.23 per barrel.
US crude inventories fell for the sixth consecutive week. For the week ending August 2, inventories dropped by 3.7 million barrels to 429.3 million barrels, significantly more than the expected 700,000-barrel decline.
Reduced production at Libya’s Sharara oil field also fueled concerns about supply shortages. Middle East tensions continued to support oil prices.
Today’s focus will be on US initial jobless claims, speeches from Federal Reserve officials, geopolitical developments, and global stock market performance.
Oil Technical Analysis:
Yesterday’s technical analysis of oil showed support at the $73 level, leading to a strong rebound. After consolidating around $73 in the Asian and European sessions, prices climbed further in the afternoon, reaching above $74.
The US session saw prices accelerate to break through $75.1 before retracing to $74.2, where it found support for another upward move, closing strongly at $75.8.
Today’s Focus:
For short-term trading, the suggested strategy is to sell on rebounds and buy on dips.
- Resistance: $76.5-$77.0
- Support: $74.0-$73.5
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Disclaimer
This information contained in this blog is for general reference only and is not intended as investment advice, a recommendation, an offer, or an invitation to buy or sell any financial instruments. It does not consider any specific recipient’s investment objectives or financial situation. Past performance references are not reliable indicators of future performance. Doo Prime and its affiliates make no representations or warranties about the accuracy or completeness of this information and accept no liability for any losses or damages resulting from its use or from any investments made based on it.
The above strategies reflect only the analysts’ opinions and are for reference only. They should not be used or considered as the basis for any trading decisions or as an invitation to engage in any transaction. Doo Prime does not guarantee the accuracy or completeness of this report and assumes no responsibility for any losses resulting from the use of this report. Do not rely on this report to replace your independent judgment. The market is risky, and investments should be made with caution.
