Nick Goold
Gold
Gold prices came under selling pressure last week as geopolitical tensions in the Middle East didn't escalate further. This relative calm on the geopolitical front led speculators to pull back from their bullish positions in gold. Typically, gold is seen as a safe-haven asset, and its appeal increases during times of uncertainty. However, with no new developments to spur demand for protection against risk, the yellow metal saw a reduction in speculative interest, contributing to its price decline.
Adding to the pressure on gold was a tough stance from Jerome Powell, the Federal Reserve Chair, regarding U.S. monetary policy. Powell's comments suggested that the Fed could continue to raise interest rates to fight the ongoing high inflation. Higher interest rates often lead to a stronger U.S. dollar and rising long-term U.S. interest rates, making gold less attractive.
This week could see gold continue to struggle as it is still priced much higher than last month. The downward pressure may persist unless the upcoming U.S. inflation data comes out significantly lower than expected. The current market trend suggests that it might be wise to wait for a price increase to sell since prices have dropped considerably below the moving average.
Resistance: 1984, 1946, 2000, 2050, 2070, 2080
Support: 1900, 1884, 1836, 1809
WTI
Crude oil prices experienced a decline for the third consecutive week, mainly due to decreased concerns about potential supply disruptions in the Middle East. The White House indicated that Israel agreed to halt military activities in northern Gaza for several hours each day. This development helped to calm fears that had previously contributed to worries about oil supply interruptions.
Additionally, comments from the Federal Reserve Chair, Jerome Powell, suggesting a continued firm approach to interest rates negatively influenced the oil markets. His hawkish stance implies that higher interest rates could be on the horizon as part of efforts to control inflation. This outlook on interest rates and the consequent possible impact on economic activity has cast a shadow over oil demand expectations.
Market sentiment was further weakened by indications of a slowdown in demand from China, the world's largest oil consumer.
However, there is a glimmer of hope for a turnaround in the coming week. Oil prices have found some support around the $75 mark. Speculators, noticing this level, may consider it an opportune moment to buy into the market, expecting the recent price drops to reverse, and prices could start to climb again.
Resistance: 80.00, 85.10, 88.50, 94.00
Support: 75.00, 70.00
