Gold
On Wednesday, gold prices initially surged but then faced resistance as US May CPI data showed a slowdown in inflation.
Gold prices briefly soared by nearly $30, but the Fed’s decision to keep rates unchanged and hint at only one rate cut this year, coupled with less dovish remarks from Fed Chair Powell, led to gold giving back most of its gains.
Spot gold rose for the third consecutive day, reaching as high as $2340, and ultimately closed up 0.27% at $2322.50 per ounce.
The Fed announced it would maintain interest rates and suggested that the first rate cut could be delayed until December. Policymakers expect only one rate cut this year, by 25 basis points, as they believe more restrictive measures are needed to control inflation.
Additionally, the Fed raised its estimate of the long-term or “neutral” rate from 2.6% to 2.8%, indicating a need for more economic restraint to combat inflation.
Gold Technical Analysis:
Yesterday, gold prices fluctuated around the $2310 level during the Asian and European sessions. In the evening US session, boosted by favorable CPI data, gold surged, breaking above $2330 and continuing to rise.
It then accelerated, briefly surpassing $2341 before falling back to $2320, where it faced repeated fluctuations. Early morning saw another surge, but prices were again pressured down from the $2339 level, closing with a choppy downtrend.
Today’s Focus:
- Short-term strategy: Favor shorting on rebounds and buying on pullbacks.
- Resistance: $2335-$2340
- Support: $2310-$2305
Oil
On Wednesday, oil prices surged then fell, supported by ongoing Middle East tensions. Prices initially rose nearly 2%, reaching a two-week high, but retreated after the Fed’s post-meeting statement suggested rate cuts might not begin until December.
WTI crude ultimately closed up 0.16% at $78.24 per barrel, while Brent crude closed up 0.43% at $82.48 per barrel.
A ceasefire agreement remains uncertain, and escalating hostilities along the Lebanon-Israel border are intensifying tensions in the Middle East. However, the Fed’s hint of delayed rate cuts disappointed investors.
Additionally, the latest US CPI data showed a slowdown in May inflation, leading to a sharp drop in the dollar and a general rebound in risk assets, narrowing oil’s gains.
Oil Technical Analysis:
Yesterday, oil prices rebounded around the $77.3 level and continued to rise. During the evening US session, oil accelerated and briefly broke above $79.3 before facing resistance and falling back. Early morning saw another drop to the $77.9 level, where it rebounded and closed with a choppy uptrend.
Today’s Focus:
- Short-term strategy: Favor buying on pullbacks and shorting on rebounds.
- Resistance: $79.4-$80.0
- Support: $76.4-$77.0
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