• Gold Price drifts higher to around $3,750 in Friday’s early Asian session.
• Traders continue to assess mixed signals from Fed officials. 
• The US PCE inflation data for August will be in the spotlight later on Friday. 

Gold Price (XAU/USD) edges higher to near $3,750 during the early Asian session on Friday. The precious metal gains ground amid expectations of further US rate cuts from the Federal Reserve (Fed) this year and rising geopolitical risks. The release of the US Personal Consumption Expenditures (PCE) Price Index data for August will take center stage later on Friday. 

The US central bank decided to cut its benchmark interest rate by 25 basis points (bps) at its September meeting, bringing the Federal Funds Rate to a target range of 4.00% to 4.25%. Traders are expecting at least two rate reductions in this year’s remaining two Fed meetings. Lower interest rates could reduce the opportunity cost of holding Gold, supporting the non-yielding precious metal. 

However, comments from Fed policymakers, including Chair Jerome Powell, indicated a lot will depend on upcoming economic data. Meanwhile, Fed Governor Stephen Miran preferred a more aggressive 0.50% cut, arguing that with temporary tariff effects aside, inflation was closer to the 2% target. The cautious tone of Fed officials might cap the upside for the yellow metal in the near term. 

Traders will closely watch the US PCE inflation data later on Friday for fresh impetus. The Fed’s preferred measure of underlying inflation likely grew at a slower pace last month. “Softer inflation could strengthen the case for Fed rate cuts, supporting bullion, with markets pricing two cuts this year,” Kaynat Chainwala, analyst at Kotak Securities Ltd., said in a Thursday note.

• Silver bounced and resumed its uptrend on Thursday to hit fresh long-term highs at $45.00.
• Safe-haven demand amid ongoing geopolitical concerns is supporting precious metals.
• XAG/USD is at overbought levels after rallying nearly 17% over the last three weeks.

Silver’s (XAG/USD) has resumed its bullish trend on Thursday, reaching fresh multi-year highs at $44,90 so far. The precious metal has drawn some support from a stalled US Dollar’s recovery, with investors cautious ahead of the final reading of the Q2 US GDP and a slew of speeches from Fed policymakers due later in the day.

Precious metals are trading higher as ongoing geopolitical tensions in Europe and the Middle East keep weighing on risk appetite. Denmark has been forced to close some of its main airports today amid reported “coordinated drone attacks,” with Russia emerging as the main suspect.

Technical Analysis: Silver is back to overbought levels

With today’s rally, the XAG/USD pair reaches levels nearly 17% above late August lows, and such steep rallies tend to come to an end. The Relative Strength Index has reached oversold levels at most time frames, which hints at a potential correction.

On the upside, a trendline resistance right above $45,00 level might challenge bulls. Above here, the 261% Fibonacci retracement of the 16-17 September pullback, at $46.10, emerges as the next potential target.

To the downside, immediate support is at the previous highs of $44.50 (September 23 high), ahead of the September 23 and 24 lows, at $43.65, and the September 16 high, at the $43.00 area.

Silver FAQs

Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.

Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold’s. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.

Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.

Silver prices tend to follow Gold’s moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.

XAU/USD Current price: $3,733.93

• Upbeat United States data boosted the US Dollar, while undermining demand for high-yielding assets.
• The US will publish August Personal Consumption Expenditures Price Index data on Friday.
• XAU/USD confined to a tight range with a modest downward tilt.

Gold price consolidates in a tight range around the $3,730 level in the American session on Thursday, as the market attention falls elsewhere. Investors are pricing in the latest round of upbeat United States (US) data, which fueled demand for the US Dollar (USD) while hitting Wall Street.

The Greenback soared after the US reported that the final estimate of the Q2 Gross Domestic Product (GDP), as annualized growth was upwardly revised to 3.8% from the previous estimate of 3.3%. Furthermore, Durable Goods Orders were up 2.9% in August, much better than the previous -2.6% slide of the anticipated -0.5%. Finally, Initial Jobless Claims for the week ended September 27 were up by 218K, better than the expected 235K and down from the 232K posted in the previous week.

The news, while boosting demand for the USD, took its toll on stocks’ markets as it cooled further down expectations for aggressive Federal Reserve (Fed) interest rate cuts. The poor performance of Wall Street helps to keep XAU/USD afloat amid resurgent safe-haven demand.

On Friday, the US will release an update on inflation. The country will unveil August Personal Consumption Expenditures (PCE) Price Index data, with the core annualized reading foreseen at 2.9%, matching the July figure. Other than that, the country will publish the final estimate of the Michigan Consumer Sentiment Index for September.

XAU/USD short-term technical outlook

The daily chart for the XAU/USD pair shows it hovers around its daily opening, confined to a tight intraday range. The odds for a steeper decline seem unlikely, as the pair is holding well-above all its moving averages, with a firmly bullish 20 Simple Moving Average (SMA) currently at around $3,633. At the same time, the Momentum indicator keeps easing, although withing positive levels, reflecting the absence of fresh buying interest rather than hinting at another leg south.

In the near term, and according to the 4-hour chart, the XAU/USD is at risk of shedding some extra ground. The pair develops below a flat 20 SMA, while still above bullish 100 and 200 SMAs. At the same time, the Momentum indicator aims firmly lower within negative levels, while the Relative Strength Index (RSI) indicator aims lower, yet around its 50 level.

Support levels: 3,722.54 3,707.40 3,691.90

Resistance levels: 3,758.80 3,779.15 3,791.00

Natural gas price took advantage of the positive momentum that comes from stochastic rally above EMA50 in yesterday’s trading, delaying the negative attack by its stability above $3.050, achieving some gains by its stability near $3.150.

The current rise didn’t affect the main bearish scenario, due to its stability below the main resistance at $2.265, to expect forming sideways trading, then begin forming bearish waves, to press on $2.820 level again, while its success in surpassing the resistance and holding above it will turn the bullish track again, providing strong chance for recording several gains by its rally to $3.450 initially.

The expected trading range for today is between $2.820 and $3.220

Trend forecast: Bearish

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Platinum price activated the attempts of gathering the gains yesterday, by its stability below the barrier of $1480.00, which forces it to decline temporarily towards $1445.00, to keep its positive stability above the extra support at $1440.00.

The continuation of the price fluctuation above the current support and stochastic attempt to provide positive momentum, will increase the chances of breaching the previously-mentioned barrier, to confirm its move to a new positive stations, to begin recording extra gains by its rally to $1515.00 and $1543.00.

The expected trading range for today is between $1460.00 and $1515.00

Trend forecast: Bullish

• Silver price attracts buyers following dovish remarks from the Fed officials.
• San Francisco Fed President Daly said more rate cuts may be needed to restore price stability and support jobs.
• The CME FedWatch tool suggests nearly a 92% possibility of a Fed rate cut in October.

Silver price (XAG/USD) maintains its position following intraday gains, trading around $44.00 per troy ounce during the European hours on Thursday. Silver prices hold ground near a 14-year high of $44.47, which was reached on Tuesday as traders put their bets on the precious metal due to dovish remarks from the US Federal Reserve (Fed) officials.

San Francisco Fed President Mary Daly said on Wednesday that further rate reductions are likely to be needed, as the central bank works to restore price stability and provide necessary support to the labor market. Chicago Fed President Austan Goolsbee broke away from the overarching narrative of consecutive Fed rate cuts heading through the end of the year, widening the narrative gap between Fed incumbents and Donald Trump’s newly minted Fed pick, Stephen Miran.

Traders will also likely observe the upcoming speeches from Kansas City Fed President Jeff Schmid, New York Fed President John Williams, Fed Governor Michael Barr, and Dallas Fed President Lorie Logan due on Thursday. The CME FedWatch tool suggests that money markets are currently pricing in nearly a 92% possibility of a Fed rate cut in October, up from 87% a week earlier.

Silver price draws support from safe-haven demand amid rising geopolitical tensions, with NATO warning Russia it would use “all necessary military and non-military measures” to defend itself, while President Trump said Ukraine could reclaim all territory held by Russia. Ukrainian President Volodymyr Zelenskiy, in a UN speech on Wednesday, urged world powers to end Russia’s war, warning it fuels a dangerous arms race, per Reuters.

The global oil market is currently under a significant spotlight as prices fluctuate due to various geopolitical and economic factors. As of the latest reports, West Texas Intermediate (WTI) crude oil is forecasted to hover around $61.87 per barrel, while Brent crude prices are expected to reach approximately $65.50. These figures come amidst ongoing pressures exerted by OPEC+ and the broader dynamics of supply and demand in the oil market. In this article, we will delve into the factors influencing these prices, the implications of OPEC+ decisions, and what analysts predict for the future of oil prices.

Understanding Oil Price Dynamics

The Role of Supply and Demand

Oil prices are primarily determined by the basic economic principle of supply and demand. When demand for oil exceeds supply, prices tend to rise. Conversely, if supply outstrips demand, prices usually fall. Recent trends indicate a complex interplay between these two forces, especially as economies around the world continue to recover from the COVID-19 pandemic. Factors such as industrial activity, travel demand, and energy transitions are influencing these dynamics.

For instance, as countries emerge from lockdowns, travel has seen a resurgence, significantly affecting oil demand. The International Air Transport Association (IATA) reported a notable increase in passenger numbers, which in turn drives up the demand for jet fuel. Additionally, industrial production has ramped up in several regions, increasing the demand for crude oil in manufacturing processes.

Geopolitical Influences

Geopolitical events can have a profound impact on oil prices. Conflicts, sanctions, and diplomatic relations among oil-producing countries often create volatility. For example, ongoing tensions in the Middle East, including conflicts involving Iran or disruptions in Libya, can restrict supply, leading to price increases. Conversely, resolutions to these conflicts can stabilize or even reduce prices.

The recent conflict in Ukraine has also raised concerns over European energy security, given the continent’s reliance on imports. The potential for sanctions on Russian oil has caused ripples in the market, prompting European nations to seek alternative sources and pushing prices higher.

OPEC+ and Its Impact on Oil Prices

What is OPEC+?

The Organization of the Petroleum Exporting Countries (OPEC) is a coalition of oil-producing nations that collaborates to manage oil production levels and stabilize prices. In recent years, OPEC has expanded its coalition to include other major producers, such as Russia, forming what is known as OPEC+. This group plays a critical role in influencing global oil prices through its production decisions.

OPEC+ has historically aimed to balance the market by adjusting production levels. Their collective decisions can significantly sway oil prices, making them a focal point for analysts and investors alike.

Recent OPEC+ Decisions

OPEC+ has faced considerable challenges in balancing the needs of its member countries with the realities of a volatile market. Recent cuts in production aimed at stabilizing prices have put pressure on the group to maintain discipline among its members. Some countries may seek to boost output in response to rising prices, which can lead to an oversupply and subsequent price drops.

In 2023, OPEC+ announced a series of production cuts to address concerns over a supply glut caused by increased U.S. shale production. The aim was to support prices amid fears of a global economic slowdown. However, compliance among member countries has varied, leading to ongoing discussions about the future of these cuts.

Future Expectations

As WTI and Brent crude prices hover around $61.87 and $65.50 respectively, OPEC+ is expected to closely monitor market conditions. Analysts predict that continued adherence to production cuts will be necessary to support prices. However, any substantial increase in global demand, especially from major economies like the United States and China, could influence OPEC+ to adjust its strategies.

For example, if the U.S. economy continues to show resilience, it may lead to an uptick in oil consumption, prompting OPEC+ to reconsider their production strategies to capitalize on rising prices.

Economic Recovery and Oil Demand

Global Economic Factors

The global economic recovery from the pandemic plays a pivotal role in shaping oil demand. As countries reopen and industries ramp up production, oil consumption is increasing. The International Energy Agency (IEA) has projected a rise in demand, particularly in sectors such as transportation and manufacturing. This uptick could provide upward pressure on oil prices if production levels do not keep pace.

Emerging markets, particularly in Asia, are also contributing to increased demand as their economies rebound. For example, India has shown significant growth in oil consumption as its manufacturing and transportation sectors expand.

Transition to Renewable Energy

Another factor influencing oil prices is the ongoing transition to renewable energy sources. Governments worldwide are investing heavily in green technologies and reducing reliance on fossil fuels. While this transition is essential for long-term sustainability, it may create short-term demand fluctuations as the market adjusts to new energy paradigms. The shift towards electric vehicles (EVs) and alternative energy sources could reshape demand for oil in the years to come.

For instance, countries like Norway are leading the charge in EV adoption, aiming for a significant reduction in gasoline and diesel vehicle sales by 2025. As more nations pursue similar goals, traditional oil demand may face long-term challenges.

Price Predictions and Market Sentiment

Analyst Insights

Market analysts are divided in their predictions about the future of oil prices. Some believe that the current price ranges are sustainable, given the balance of supply and demand and OPEC+ strategies. Others warn that geopolitical tensions or a resurgence of COVID-19 cases could lead to abrupt changes in prices.

Recent reports from major financial institutions highlight a cautious optimism, suggesting that prices may stabilize in the coming months if OPEC+ maintains its discipline with production cuts. However, they also caution that any potential economic downturn could lead to reduced demand and lower prices.

Short-Term vs. Long-Term Outlook

In the short term, WTI and Brent prices are likely to remain volatile, influenced by immediate market factors and OPEC+ decisions. In the long term, however, the transition to renewable energy and changing consumption patterns may lead to a more stable pricing environment. Investors and stakeholders in the oil market should remain vigilant and consider a range of scenarios as they make strategic decisions.

For instance, while the short-term outlook might suggest price fluctuations due to geopolitical tensions or market adjustments, the long-term implications of energy transitions could redefine the global energy landscape.

Conclusion

The forecast for oil prices, with WTI at $61.87 and Brent at $65.50, reflects the complex interplay of global economic recovery, OPEC+ decisions, and geopolitical influences. While current prices may seem stable, the oil market remains susceptible to rapid changes due to external pressures and evolving demand dynamics. Stakeholders in the oil industry, from traders to policymakers, must stay informed and agile to navigate this landscape effectively.

FAQs

Q1: What factors can cause oil prices to rise?
A1: Oil prices can rise due to increased demand, geopolitical tensions, production cuts by OPEC+, and disruptions in supply chains.

Q2: How does OPEC+ influence global oil prices?
A2: OPEC+ influences prices by coordinating production levels among member countries to stabilize or manipulate supply in response to market conditions.

Q3: What are the long-term implications of the shift to renewable energy on oil prices?
A3: The shift to renewable energy may lead to decreased long-term demand for oil, potentially resulting in lower prices and a need for oil producers to adapt their strategies.

Q4: How does the COVID-19 pandemic affect oil demand?
A4: The pandemic has caused significant disruptions to global travel and industrial activity, leading to decreased oil demand. As economies recover, demand is expected to rise, influencing prices.

Q5: What role do economic indicators play in oil price forecasts?
A5: Economic indicators such as GDP growth, industrial activity, and consumer spending provide insights into demand trends, helping analysts predict future oil price movements.

Q6: What recent geopolitical events have influenced oil prices?
A6: Events like the Ukraine conflict, sanctions on Iran, and tensions in the Middle East have all contributed to fluctuations in oil prices by impacting global supply chains.

Q7: What are the implications of rising oil prices for consumers?
A7: Rising oil prices can lead to higher fuel costs, which may affect transportation and goods pricing, ultimately impacting consumer spending and inflation rates.

In summary, while the oil market continues to experience fluctuations, understanding the underlying factors and keeping abreast of global developments will be essential for stakeholders navigating this complex landscape.

• Gold price gains ground to near $3,750 in Thursday’s early Asian session.
• Geopolitical tensions and uncertainty boost the safe-haven flows. 
• Fed Powell’s cautious remarks on potential interest rate cuts might cap the Gold’s upside. 

Gold price (XAU/USD) trades in positive territory around $3,750 during the early Asian session on Thursday. The precious metal edges higher amid expectations of further US rate cuts from the Federal Reserve (Fed) this year and persistent geopolitical risks.

The Fed cut its benchmark interest rate by 25 basis points (bps) at its September meeting, bringing the Federal Funds Rate to a target range of 4.00% to 4.25%. A Summary of Economic Projections (SEP), or ‘dot-plot’, showed that the median Fed policymakers expect two more rate reductions before the end of 2025, and one more in 2026. Lower interest rates could reduce the opportunity cost of holding Gold, supporting the non-yielding precious metal. 

Furthermore, geopolitical uncertainty boosted demand for safe-haven assets like Gold. NATO warned Russia on Tuesday that it would use “all necessary military and non-military tools” to defend itself as it condemned Moscow for violating Estonian airspace in “a pattern of increasingly irresponsible behaviour”.

On the other hand, cautious remarks from Fed Chair Jerome Powell about the timing of the next cut in US interest rates might cap the upside for the yellow metal. Powell said on Tuesday that the US central bank would continue to balance concerns over labour market weakness with worries about inflation, while Fed officials took stances on both sides of the monetary policy path divide.

WTI Crude (CL=F) Climbs to $64.77 as Inventory Draws Tighten Supply

Russian Refinery Outages Slash Diesel Exports to Five-Year Low

Russian refining capacity has been heavily disrupted by Ukrainian drone strikes, with Energy Aspects estimating up to 1 million barrels per day knocked offline. OilX and Vortexa project diesel exports this month will slump to their lowest in five years. Moscow has already maintained a gasoline export ban through most of 2025, citing refinery constraints and domestic financing shortages. While diesel exports have not been formally capped, the physical shortfall is tightening European product balances and sustaining crack spreads above seasonal norms. The result is higher margins for refiners globally and a key factor behind Brent’s resilience above $68.

Turkey Signs 20-Year U.S. LNG Pact While Pivoting Away From Russia

Turkey’s state energy firm BOTAS secured a 20-year LNG supply contract with Mercuria, committing to roughly 70 bcm of U.S. LNG through 2045. A separate nine-year agreement with Australia’s Woodside adds 5.8 bcm of LNG starting in 2030. These deals reduce Ankara’s dependence on Russian pipeline flows and set the foundation for Turkey to become a European LNG hub. The shift carries long-term consequences for oil-linked gas pricing, eroding Gazprom’s influence and bolstering U.S. export demand. While LNG is not crude, the pivot reshapes energy flows in Europe and adds to geopolitical pressure on Russian oil exports.

Federal Reserve Commentary Lifts Dollar, Caps Crude Momentum

Fed Chair Jerome Powell warned that U.S. equity valuations appear “fairly highly valued,” pushing the DXY dollar index to 97.30. The stronger dollar normally weighs on crude, but despite the currency move, both WTI and Brent held firm. This highlights how near-term oil price formation is being driven primarily by physical balances and supply disruptions rather than macro sentiment alone. Traders warn, however, that continued dollar strength could limit Brent’s ability to breach $70 convincingly.

Technical Setup Points to Potential Breakout in WTI and Brent

Technically, WTI crude has reclaimed the 50-day EMA at $64.50 and is approaching the $66.00 resistance band. A daily close above $66 could open momentum toward $68, while downside protection sits at $62 and then $60. Brent crude faces a similar setup, with the $69–$70 zone acting as a ceiling. A breakout would clear the way to $72, while $65 remains the critical floor. Indicators confirm improving momentum, with RSI recovering above 50 and MACD signaling a potential bullish crossover.

Geopolitical Overhang: Trump Remarks, Ukraine, and OPEC+ Exports

Geopolitical narratives continue to shape sentiment. President Trump stated at the U.N. that Ukraine’s battlefield performance has “surpassed expectations,” fueling speculation of harsher sanctions on Russian energy. OPEC+ supply is also shifting—Kuwait increased output to 3.2 million barrels per day, its highest in a decade, offsetting some Russian shortfalls. Iraq, too, has been ramping exports as OPEC+ gradually rolls back earlier cuts. This balancing act between OPEC+ increases and Russian constraints defines the push-pull dynamic currently holding crude in the mid-$60s to high-$60s range.

Energy Majors and Infrastructure Investment Signal Long-Term Confidence

Deals across the energy sector reinforce confidence in elevated pricing. Petrobras awarded TechnipFMC subsea contracts worth $75–$250 million to bolster offshore production. Sempra Energy sold a $10 billion infrastructure stake to KKR, while Exxon and Petrobras jointly challenged a $4.6 billion merger in Brazil’s subsea sector. These moves show upstream and midstream players are positioning aggressively for a decade of resilient oil demand, underscoring why crude prices are finding strong structural support despite recessionary concerns.

Buy or Sell? WTI (CL=F) and Brent (BZ=F) Outlook

With WTI at $64.77 and Brent at $69.00, both benchmarks are trading near critical resistance but remain underpinned by inventory draws, delayed Kurdish flows, and Russian export disruptions. Technicals point to upside toward $70–$72 for Brent and $66–$68 for WTI if momentum holds. The downside remains cushioned by $62 support for WTI and $65 for Brent. Considering the tightening fundamentals and geopolitical backdrop, the balance of risk favors a Buy stance on crude benchmarks, with near-term upside stronger than downside risk into October.

That’s TradingNEWS