Gold
On June 4, weaker-than-expected U.S. economic data bolstered expectations of a Federal Reserve rate cut later this year, causing the dollar and bond yields to drop and helping gold rebound from its 55-day moving average.
Spot gold is currently trading at $2350.41 per ounce. Gold prices rose nearly 1% on Monday, closing at $2350.28 per ounce, as the weaker U.S. economic data supported the anticipation of a Fed rate cut, lowering the dollar and bond yields and aiding the gold rebound.
Last Friday’s data showed that U.S. inflation in April stabilized, indicating that the Fed’s plan for rate cuts later this year remains unchanged. According to the CME FedWatch Tool, traders now see a 61% chance of a Fed rate cut in September, up from about 50% the previous day. Lower interest rates reduce the opportunity cost of holding non-yielding gold.
Gold Technical Analysis:
Yesterday, the technical analysis showed that the upper resistance is around the previous hourly top-bottom conversion level at $2341-43, with strong resistance at the $2350 mark.
Intraday rebounds are expected to face this resistance, continuing to look for downward movement.
The short-term key level is $2360, with any rebound below this level considered a shorting opportunity. The main trend remains to follow the downward momentum.
Today’s Focus:
- Short-term strategy: Wait patiently for key entry points.
- Resistance: $2360-$2363
- Support: $2335-$2337
Oil
WTI crude oil is hovering around $74.05 per barrel. On Monday, WTI crude prices fell over $2, reaching their lowest level in nearly four months, as investors worried about demand prospects and interpreted OPEC+’s complex production decisions as a sign that member countries are eager to export more oil.
On June 2, OPEC+ agreed to extend most of its deep production cuts until 2025, but allowed eight member countries to gradually lift voluntary cuts starting in October. The alliance also set a new production target for the UAE, which has been pushing for a higher quota.
Oil Technical Analysis:
The technical analysis showed a continuous downward trend with significant volatility. During the Asian and European sessions, prices fluctuated around the $77 mark.
In the evening U.S. session, oil prices accelerated downward, breaking through the $75 and $74 levels, closing at the day’s lowest point, indicating a bearish trend.
Today’s Focus:
- Short-term strategy: Follow the downward trend.
- Resistance: $75.3-$75.5
- Support: $73.8-$74.0
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