Gold
On Friday, gold prices fell more than 1% due to a stronger dollar and rising bond yields, following data showing robust US business activity.
Spot gold fell below $2320 per ounce during the session, dropping nearly 2% at its lowest, shedding almost $50 from the day’s high, and finally closing down 1.62% at $2321.87 per ounce. For the week, spot gold closed at $2321.19 per ounce, down 0.49%.
Gold started the week strong but declined towards the weekend. August gold futures closed at $2334.7 per ounce on Friday, down 0.58% for the week. Low summer market liquidity can lead to increased volatility. Meanwhile, uncertainty remains high as the market tries to predict the Fed’s next move.
Gold Technical Analysis:
Last Thursday and Friday saw extreme shifts between bullish and bearish trends. After a strong breakout above $2350 on Thursday, gold faced resistance and fell below the $2368 level on Friday.
In the evening US session, gold accelerated its decline, breaking through the $2350, $2340, and $2330 levels, closing near the day’s low at $2316.
Today’s Focus:
- Short-term strategy: Favor shorting on rebounds and buying on pullbacks.
- Resistance: $2335-$2340
- Support: $2305-$2300
Oil
On Friday, oil prices experienced volatility, entering overbought territory before falling nearly 1%. WTI crude closed down 0.83% at $80.96 per barrel, while Brent crude closed down 0.66% at $84.32 per barrel. However, signs of reduced US inventories and rising fuel demand led to a second consecutive week of gains for international oil prices, with a weekly increase of over 3%.
Rising US oil demand and falling fuel inventories provided support for the oil market, while geopolitical tensions added uncertainty. The strong dollar significantly impacted the oil market, with the dollar index reaching a seven-week high, making dollar-priced oil more expensive for holders of other currencies and potentially suppressing global oil demand. Nonetheless, strong US economic activity, particularly June’s business activity hitting a 26-month high, supported oil demand.
The EIA reported a significant increase in total oil product supply last week, reaching 21.1 million barrels per day, indicating a tightening US oil market. The onset of the summer driving season and declining inventories boosted U.S. gasoline futures prices, reflecting increased demand.
Oil Technical Analysis:
On Friday, oil prices initially surged past the $81.8 resistance level but then fell back, closing lower.
Today’s Focus:
- Short-term strategy: Favor buying on pullbacks and shorting on rebounds.
- Resistance: $82.0-$82.5
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