Nick Goold
Gold
Gold's bull run continued last week, seeing prices surpassing the critical $2,000 level. Several factors contributed to this surge, the most notable being the ongoing conflict between Israel and Hamas. This geopolitical tension, coupled with the decline in long-term US interest rates, which consequently weakened the US dollar, has acted in favour of strengthening gold's position. In times of political unrest and economic uncertainty, gold often emerges as a preferred safe-haven asset for investors.
The unabating nature of the Israel-Hamas conflict, combined with Israel's indications of a prolonged war after they entered Gaza, reinforces the belief that the allure surrounding gold as an investment will only intensify. With the conflict's intensity ratcheting up over the weekend, the precious metal appears poised for active trading in the upcoming week.
As market dynamics play out this week, there's an anticipation of heightened buying interest in gold. However, the week's commencement may see some consolidation, hovering around the $2,000 mark. This movement will largely be contingent on market sentiment relating to the evolving situation in Gaza. For those eyeing short-term trading opportunities, if prices remain close to $2,000, then range trading appears to be best. Meanwhile, for medium-term traders, moments of market weakness present optimal buying opportunities, particularly closer to the 10-day moving average.
Resistance: 2050, 2070, 2080
Support: 1984, 1946, 1900, 1884, 1836, 1809
WTI
WTI started last week under pressure, predominantly due to apprehensions surrounding global demand. These concerns exerted selling pressure, driving prices beneath the 10-day moving average. Nevertheless, the support level at $82.50 remained steadfast. This resilience can be attributed, in part, to the ongoing conflict in Gaza, as there are fears that it could lead to constraints in oil supplies. This notion was further exemplified when two distinct Egyptian Red Sea towns were struck by stray projectiles early Friday, underscoring the global market's anxieties about the conflict between Israel and Hamas potentially spilling over to adjacent areas.
However, as geopolitical tensions extend beyond the Jordan region, energy investors face a dilemma. The growing signs of a global economic slowdown are becoming increasingly difficult to disregard. This has given rise to apprehensions in the fossil fuel sector, with many stakeholders speculating a decline in demand for Crude Oil barrels in the forthcoming months.
Despite these challenges, WTI's technical indicators currently suggest a neutral or sideways movement. Nevertheless, prices could be primed for an upward trajectory as the conflict escalates in Gaza, so seeking buying opportunities could be best this week.
Resistance: 88.50, 94.00, 100.00
Support: 82.50, 80.00, 78.50, 75.00, 70.00
