Gold
On Monday, gold prices rose as Fed Chair Jerome Powell indicated progress in the fight against inflation, boosting market expectations for a rate cut in September.
Spot gold climbed to a nearly two-month high, reaching $2440 before closing up 0.46% at $2421.90 per ounce. Traders are now awaiting more comments from Fed officials to gauge the timing of a rate cut.
Powell stated that three sets of inflation data from the second quarter show “more progress” in bringing inflation closer to the Fed’s target. Meanwhile, US long-term bond yields rose as markets assessed the impact of an assassination attempt on presidential candidate Donald Trump.
This week’s focus will be on US June retail sales (known as “scary data”), industrial production data, and weekly jobless claims, which could provide further clues on the Fed’s rate cut timing.
Gold Technical Analysis:
Yesterday, gold found support at the $2401 level during the Asian and European sessions, leading to a strong upward trend. Prices briefly dipped to $2401 before rebounding and breaking past the $2413 resistance level. In the US session, gold surged past $2439 before pulling back and closing slightly lower.
Today’s Focus:
- Short-term strategy: Favor buying on pullbacks and shorting on rebounds.
- Resistance: $2435-$2440
- Support: $2410-$2405
Oil
On Monday, oil prices fell as concerns over demand from the largest importer outweighed supportive factors such as US economic news, OPEC+ supply restrictions, and ongoing Middle East tensions.
WTI crude closed down 0.24% at $81.94 per barrel, while Brent crude closed down 0.11% at $84.86 per barrel.
Conflicting market forces kept oil prices low. A stronger dollar and demand concerns exerted downward pressure, while OPEC+ supply cuts provided support. The failed assassination attempt on former US President Donald Trump strengthened the dollar, affecting oil prices. A stronger dollar makes oil more expensive for buyers using other currencies, potentially reducing demand.
Despite bearish factors, OPEC+ production cuts continued to support the oil market. Iraq recently pledged to compensate for excess production since early 2024, further bolstering support. Middle East geopolitical tensions provided a geopolitical premium for oil prices. However, the ample spare capacity held by Saudi Arabia and other OPEC members limited upward pressure.
Oil Technical Analysis:
Yesterday, oil prices saw limited fluctuations, with a slight rebound to $82.5 in the Asian and European sessions, followed by a decline. In the US session, oil briefly fell below $81.5 before stabilizing and closing near $82, marking a day of narrow trading.
Today’s Focus:
- Short-term strategy: Favor buying on pullbacks and shorting on rebounds.
- Resistance: $82.8-$83.3
- Support: $81.0-$80.5
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