Driven by a surge in safe-haven inflows, gold prices soared by over $40, as traders await US inflation data later this week, which could provide more insights into the Federal Reserve’s potential rate cut trajectory.
Oil prices jumped over 3%, marking the fifth straight day of gains, amid growing concerns that escalating Middle East tensions could tighten global oil supplies, reaching the highest level since July 19.
Gold
On Monday, gold prices surged by over $40, fueled by strong safe-haven demand as traders awaited US inflation data, which could offer further clues on the Fed’s potential rate cut path.
Spot gold rallied significantly, breaking above the $2,470 mark, ultimately closing up 1.69% at $2,472.14 per ounce, its highest level since August 2.
The Israeli military continued operations near Khan Younis in southern Gaza, despite international efforts to broker a ceasefire and prevent a broader regional conflict involving Iran and its proxies. US Treasury yields declined on Monday, further boosting gold prices.
Markets are now eyeing Tuesday’s US Producer Price Index (PPI) data and Wednesday’s Consumer Price Index (CPI) data for more insights into inflation trends, which are crucial for the Fed’s decision-making at its September meeting.
Gold Technical Analysis:
Yesterday, gold leveraged support at the $2,427 level, initiating a strong upward movement. During the European and Asian sessions, prices steadily climbed, breaking through both the $2,430 and $2,440 resistance levels. The US session saw further consolidation near the $2,445 mark before a strong upward push drove prices above $2,470, closing with a bullish breakout.
Today’s Focus:
Today’s short-term gold strategy suggests prioritizing buying on dips, with selling on rebounds as a secondary approach.
- Key resistance levels: $2,483-$2,488
- Key support levels: $2,458-$2,453
Oil
On Monday, oil prices surged over 3%, driven by concerns that an escalating Middle East conflict could tighten global oil supplies, marking the fifth consecutive day of gains and hitting the highest levels since July 19. WTI crude closed up 3.35% at $79.58 per barrel, while Brent crude rose 2.89% to close at $82 per barrel.
Over the weekend, the US Department of Defense announced the deployment of a cruise missile submarine to the Middle East in response to potential attacks on Israel by Iran and its allies. The possible escalation could further strain global oil supplies and push prices higher.
Meanwhile, three Fed policymakers indicated last week that inflation appears to be cooling, potentially allowing the Fed to cut rates as early as next month. However, the Organization of the Petroleum Exporting Countries (OPEC) lowered its 2024 global oil demand growth forecast on Monday, citing weakening demand expectations from major Asian economies, highlighting the challenges OPEC+ may face in increasing production starting in October.
Today’s focus includes the International Energy Agency’s (IEA) monthly oil market report, the American Petroleum Institute’s (API) inventory data, US July PPI data, and ongoing geopolitical developments.
Oil Technical Analysis:
Yesterday, oil prices found support around $74.6 during the Asian and European sessions before climbing higher. The US session saw a strong upward movement, breaking above the $76 level and closing with significant gains.
Today’s Focus:
Today’s short-term oil strategy suggests prioritizing buying on dips, with selling on rebounds as a secondary approach.
- Key resistance levels: $80.5-$81.0
- Key support levels: $78.5-$78.0
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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.
