Gold
On Tuesday, hawkish comments from Fed Governor Bowman boosted the dollar, significantly pressuring gold prices. Additionally, Israel’s inclination towards a diplomatic resolution to the conflict reduced safe-haven demand, causing gold to drop nearly 1%, hitting a one-week low during the session. Spot gold fell below the $2320 level, ultimately closing down 0.64% at $2319.46 per ounce.
The dollar rose by 0.2% on Tuesday, closing at 105.63, making gold more expensive for investors holding other currencies. The 10-year US Treasury yield also edged higher. This week, the market is focused on Thursday’s US Q1 GDP data and Friday’s Personal Consumption Expenditures (PCE) Price Index report, as these could provide clues about the timing of a Fed rate cut this year.
Gold Technical Analysis:
Yesterday, gold saw initial gains followed by a decline. During the Asian and European sessions, prices fell to the $2322 level before rebounding to $2330 and then surging to $2337. However, the rally lost momentum, and prices fell sharply during the U.S. session, breaking below the Asian session low of $2322 and closing weakly around $2315.
Today’s Focus:
- Short-term strategy: Favor shorting on rebounds and buying on pullbacks.
- Resistance: $2335-$2340
- Support: $2305-$2300
Oil
On Tuesday, weak US consumer confidence data heightened economic concerns, adding to worries about demand following a tepid start to the summer driving season.
Additionally, hawkish Fed comments and a surprise increase in API crude inventories weighed on oil prices, which fell over 1%. WTI crude closed down 1.26% at $80.52 per barrel, while Brent crude closed down 1.36% at $84.10 per barrel.
US consumer confidence declined in June. Although households remained optimistic about the labor market and expected inflation to ease in the coming year, concerns about economic weakness suggested reduced gasoline demand.
The latest API data showed an unexpected increase in crude inventories by 910,000 barrels, while the market had expected a decrease of 3 million barrels. API gasoline inventories also unexpectedly rose by 3.843 million barrels, contrary to expectations of a 1.05 million barrel decline.
The dollar strengthened on Tuesday, supported by hawkish Fed comments and stable US housing data, indicating that the Fed is not in a hurry to start a rate cut cycle, further dampening demand expectations.
Oil Technical Analysis:
Yesterday, oil prices faced resistance twice at the $81.8 level, leading to a downward correction and closing lower.
Today’s Focus:
- Short-term strategy: Favor shorting on rebounds and buying on pullbacks.
- Resistance: $82.0-$82.5
- Support: $79.7-$79.2
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