Gold
On Tuesday, supported by heightened geopolitical tensions and growing expectations of a Fed rate cut next week, gold surged to a 2-week high of $2698.20 per ounce. The upward momentum continued throughout the day, with gold ultimately closing 1.25% higher at $2693.59 per ounce.
Reports indicate that the Israeli Defense Forces (IDF) launched airstrikes on 320 strategic targets in Syria, aiming to eliminate weapons that could fall into the hands of enemy forces. According to Peter Grant, Vice President and Senior Metals Strategist at Zaner Metals, “Concerns over escalating tensions in the Middle East are driving safe-haven demand for gold.”
The broader global trend of monetary easing also contributed to gold’s rally. Analysts predict rate cuts this week from the Bank of Canada, the European Central Bank, and the Swiss National Bank. The Fed is also expected to reduce rates next week, with the CME FedWatch Tool showing an 85.8% chance of a 25-basis-point rate cut at the upcoming meeting.
However, the bullish sentiment faced headwinds from a stronger US dollar and higher Treasury yields. The US dollar index climbed to a one-week high, marking its third consecutive day of gains. Meanwhile, the 10-year US Treasury yield rose 2.32 basis points to 4.2244%.
Investors are now awaiting key US inflation data, including the Consumer Price Index (CPI) on Wednesday and the Producer Price Index (PPI) on Thursday, which will play a critical role in shaping the Fed’s rate decision next week. Additionally, geopolitical developments and the Bank of Canada’s interest rate decision will be under close watch.
Gold Technical Analysis:
On the technical front, gold saw steady gains throughout the day, starting with a brief pullback near the $2660 level, followed by a strong bullish breakout. Prices surged past the $2680 mark and climbed higher to close near the daily high of $2693. The daily chart shows a bullish breakout, with strong momentum propelling prices into a bullish territory.
Today’s Focus:
Today’s trading strategy suggests prioritizing buy positions on dips, with short-sell positions considered on rebounds.
- Resistance Levels: $2710 – $2715
- Support Levels: $2680 – $2675
Oil
On Tuesday, crude oil extended its gains, driven by an increase in China’s crude oil imports and concerns over potential supply shortages in Europe this winter. At the close, WTI January crude oil futures rose $0.22 (0.32%) to settle at $68.59 per barrel, while Brent February futures inched up $0.05 (0.07%) to $72.19 per barrel.
Recent data reveals that China’s crude oil imports in November increased for the first time in seven months, fueled by lower Middle Eastern oil prices and increased stockpiling. China imported 48.52 million metric tons of crude oil last month, up 14.3% from the 42.45 million tons recorded a year earlier.
Phil Flynn, Senior Analyst at Price Futures Group, noted that supply concerns in Europe also contributed to oil’s upward momentum. He stated, “Hedge funds are buying in anticipation of tight supply in the European market this winter.”
On the demand side, the US Energy Information Administration (EIA) released its Short-Term Energy Outlook, reducing its 2024 global crude demand growth forecast from 1 million barrels per day (bpd) to 900,000 bpd. The agency maintained its 2025 demand growth forecast at 1.3 million bpd. The EIA also forecasted that US net crude imports will fall by 20% to 1.9 million bpd in 2024, marking the lowest level since 1971, highlighting increased US production and reduced refinery demand.
Morgan Stanley’s latest 2025 commodity outlook suggests that if OPEC+ maintains its current production levels, Brent crude prices could stabilize at $70 per barrel by the end of 2024. The outlook projects WTI crude to average $64 per barrel by the end of 2024 and fall further to $61 in 2025, while Brent is forecasted to ease to $61 per barrel.
Oil Technical Analysis:
Technically, oil prices found support near the $67.7 level, with the bulls pushing prices higher. During the US trading session, WTI briefly broke above the $69 level before facing resistance. The daily chart recorded a “doji” candle, reflecting market indecision. Prices remain in a narrow range, with potential resistance at $70 and support at $67.
Today’s Focus:
Today’s trading strategy advises prioritizing buy positions on dips, with short-sell positions considered on rebounds.
- Resistance Levels: $69.5 – $70.0
- Support Levels: $67.3 – $66.8
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Disclaimer
This information contained in this blog is for general reference only and is not intended as investment advice, a recommendation, an offer, or an invitation to buy or sell any financial instruments. It does not consider any specific recipient’s investment objectives or financial situation. Past performance references are not reliable indicators of future performance. Doo Prime and its affiliates make no representations or warranties about the accuracy or completeness of this information and accept no liability for any losses or damages resulting from its use or from any investments made based on it.
The above strategies reflect only the analysts’ opinions and are for reference only. They should not be used or considered as the basis for any trading decisions or as an invitation to engage in any transaction. Doo Prime does not guarantee the accuracy or completeness of this report and assumes no responsibility for any losses resulting from the use of this report. Do not rely on this report to replace your independent judgment. The market is risky, and investments should be made with caution.
