• Gold price bounces off $2,400 amid a positive start to a Big week.
• Despite risk aversion, the US Dollar stays softer with US Treasury bond yields.    
• Gold price looks to $2,425, as the daily RSI turns north above 50.

Gold price is attempting a bounce from $2,400, having snapped a three-day corrective decline from record highs of $2,484. Gold price capitalizes on a broad-based US Dollar softness alongside sluggish US Treasury bond yields even as markets stay risk averse.

Gold price keenly awaits top-tier US economic data

As investors digest the recent US political developments, the US Dollar maintains a weaker undertone so far this Monday. On Sunday, US President Biden dropped out of the election race and endorsed Vice President Kamala Harris for the Democratic ticket. Online betting site PredictIT showed pricing for a victory by Donald Trump had fallen 4 cents to 60 cents, while Harris climbed 12 cents to 39 cents, per Reuters.

A Democratic win would imply higher taxes and the need for lower borrowing costs, suggesting that policy easing for the US Federal Reserve (Fed). This, in turn, would be bearish for the US Dollar in the long term. Therefore, the Greenback is unable to take advantage of the market’s anxiety amid renewed China growth worries while gearing up for key US event risks later this week.

The US equity and Treasury futures rise, exerting negative pressure on the US Treasury bond yields across the curve, lending additional support to the non-yielding Gold price. Markets also seem to ignore the People’s Bank of China’s (PBOC) interest-rate cuts to its one-year and five-year mortgage lending rates, as it raises concerns that the government recognizes the downward pressure on China’s economy.

Markets also stay unnerved as a packed week of corporate earnings unfolds, with Tesla and Google-parent Alphabet due on the cards. Additionally, traders resort to repositioning ahead of Thursday’s advance US second-quarter Gross Domestic Product (GDP) and the Fed favored inflation gauge out on Friday. 

Markets are currently pricing in a September rate cut, as futures show a 97% chance, according to the CME Group’s FedWatch Tool.

Ahead of these key events, Gold price could maintain a buoyant tone amid dovish Fed expectations and the US political uncertainty. However, the fading Asian physical demand for Gold price could act as a headwind for the bright metal. Asian customers, especially the Indians, refrained from making new purchases despite deep discounts, as they preferred to book profits on record-high bullion prices.

China, dealers were offering discounts of up to $6 an ounce on international spot prices, the lowest in more than two years as per Reuters records.

Gold price technical analysis: Daily chart

Gold price has found fresh buyers, as the 14-day Relative Strength Index (RSI) stalls its descent and turns north again while holding above the 50 level. The indicator is currently at 55.

The 21-day  and 50-day Simple Moving Averages (SMA) Bull Cross also remains in play, adding credence to the renewed upside in Gold price.

if Gold price rebound picks up strength, the $2,425 static resistance will be tested. The next topside barrier is seen at the previous lifetime high of $2,450, above which buyers will target the new all-time high of $2,484 reached last week.

Conversely, should sellers fight back control, Gold price could challenge the $2,400 threshold once again. Acceptance below that level could accentuate the downside toward the 21-day SMA at $2,376.

Additional weakness could expose the 50-day SMA support at $2,360.

 

• Gold price bounces off $2,400 amid a positive start to a Big week.
• Despite risk aversion, the US Dollar stays softer with US Treasury bond yields.    
• Gold price looks to $2,425, as the daily RSI turns north above 50.

Gold price is attempting a bounce from $2,400, having snapped a three-day corrective decline from record highs of $2,484. Gold price capitalizes on a broad-based US Dollar softness alongside sluggish US Treasury bond yields even as markets stay risk averse.

Gold price keenly awaits top-tier US economic data

As investors digest the recent US political developments, the US Dollar maintains a weaker undertone so far this Monday. On Sunday, US President Biden dropped out of the election race and endorsed Vice President Kamala Harris for the Democratic ticket. Online betting site PredictIT showed pricing for a victory by Donald Trump had fallen 4 cents to 60 cents, while Harris climbed 12 cents to 39 cents, per Reuters.

A Democratic win would imply higher taxes and the need for lower borrowing costs, suggesting that policy easing for the US Federal Reserve (Fed). This, in turn, would be bearish for the US Dollar in the long term. Therefore, the Greenback is unable to take advantage of the market’s anxiety amid renewed China growth worries while gearing up for key US event risks later this week.

The US equity and Treasury futures rise, exerting negative pressure on the US Treasury bond yields across the curve, lending additional support to the non-yielding Gold price. Markets also seem to ignore the People’s Bank of China’s (PBOC) interest-rate cuts to its one-year and five-year mortgage lending rates, as it raises concerns that the government recognizes the downward pressure on China’s economy.

Markets also stay unnerved as a packed week of corporate earnings unfolds, with Tesla and Google-parent Alphabet due on the cards. Additionally, traders resort to repositioning ahead of Thursday’s advance US second-quarter Gross Domestic Product (GDP) and the Fed favored inflation gauge out on Friday. 

Markets are currently pricing in a September rate cut, as futures show a 97% chance, according to the CME Group’s FedWatch Tool.

Ahead of these key events, Gold price could maintain a buoyant tone amid dovish Fed expectations and the US political uncertainty. However, the fading Asian physical demand for Gold price could act as a headwind for the bright metal. Asian customers, especially the Indians, refrained from making new purchases despite deep discounts, as they preferred to book profits on record-high bullion prices.

China, dealers were offering discounts of up to $6 an ounce on international spot prices, the lowest in more than two years as per Reuters records.

Gold price technical analysis: Daily chart

Gold price has found fresh buyers, as the 14-day Relative Strength Index (RSI) stalls its descent and turns north again while holding above the 50 level. The indicator is currently at 55.

The 21-day  and 50-day Simple Moving Averages (SMA) Bull Cross also remains in play, adding credence to the renewed upside in Gold price.

if Gold price rebound picks up strength, the $2,425 static resistance will be tested. The next topside barrier is seen at the previous lifetime high of $2,450, above which buyers will target the new all-time high of $2,484 reached last week.

Conversely, should sellers fight back control, Gold price could challenge the $2,400 threshold once again. Acceptance below that level could accentuate the downside toward the 21-day SMA at $2,376.

Additional weakness could expose the 50-day SMA support at $2,360.

 

• Gold price extends correction from all-time highs of $2,484, paring weekly gains early Friday.
• The US Dollar rebounds firmly with US Treasury bond yields amid risk-aversion and Fed uncertainty.    
• Gold buyers stay hopedul as the daily RSI still holds above 50, ‘buy the dips’?

Gold price is on a three-day corrective decline from record highs of $2,484 on Friday, paring back weekly gains amid a solid rebound staged by the US Dollar (USD) alongside the US Treasury bond yields.  

Gold price consolidates weekly gains ahead of more Fedspeak

The Greenback witnessed a dramatic comeback in the second half of Thursday’s trading after risk-aversion gripped markets, as Wall Street traders remained wary, rotating away from high-priced megacap growth stocks amid second-quarter earnings season.

Escalating trade tensions between the US and China combined with uncertainty on whether the US Federal Reserve (Fed) will go for another interest-rate cut after lowering rates in September weighed on the market sentiment, lifting the US Treasury bond yields across the curve. This, in turn, propelled the US Dollar from four-month troughs against its major currency rivals.

Markets are fully pricing in the September Fed rate cut while another cut in December is also likely, according to the CME Group’s FedWAtch Tool.

San Francisco Fed President Mary Daly participated in a ‘fireside chat’ at a conference late Thursday, noting that she is looking for more confidence that inflation is moving back to the Fed’s 2% target before calling for an interest rate cut.

Meanwhile, data on Thursday showed that US jobless claims rose to the highest level in nearly a year to a seasonally adjusted 243,000 for the week ended July 13. On the other hand, The Philly Fed Manufacturing Index jumped from 1.3 in June to an impressive 13.9 in July, reaching its highest point since April and smashing the 2.9 forecast. Mixed US economic data combined with prudent Fed commentary raised concerns on the scope of the Fed rate cuts this year.

Looking ahead, all eyes will remain on the speeches from the Fed officials, as the US central bank enters its ‘blackout period’ on Saturday before July 30-31 policy meeting. Fed policymakers John Williams and Raphael Bostic are due to speak later in the American session on Friday.  

Also, Gold traders will stay cautious, as the end-of-the-week flows will remain in play and position readjustments ahead of next week’s advance US Gross Domestic Product (GDP) data for the second quarter.

Gold price technical analysis: Daily chart

Despite the recent retracement, the bullish bias for Gold price remains intact so long as the 14-day Relative Strength Index (RSI) remains above the 50 level. The indicator is currently at 60.

The previous week’s 21-day  and 50-day Simple Moving Averages (SMA) Bull Cross also continues to lean in favor of Gold buyers.

The immediate support for Gold price is seen at the previous week’s high of $2,425. A sustained move below that level could accentuate the downside toward the 21-day SMA at $2,373.

Ahead of that, the $2,400 mark could come into play.

On the flip side, if Gold price resumes its uptrend, the previous lifetime high at $2,450 will be put to the test, above which the new all-time high of $2,484 will be challenged en route the $2,500 barrier.  

 

• Gold price extends correction from all-time highs of $2,484, paring weekly gains early Friday.
• The US Dollar rebounds firmly with US Treasury bond yields amid risk-aversion and Fed uncertainty.    
• Gold buyers stay hopedul as the daily RSI still holds above 50, ‘buy the dips’?

Gold price is on a three-day corrective decline from record highs of $2,484 on Friday, paring back weekly gains amid a solid rebound staged by the US Dollar (USD) alongside the US Treasury bond yields.  

Gold price consolidates weekly gains ahead of more Fedspeak

The Greenback witnessed a dramatic comeback in the second half of Thursday’s trading after risk-aversion gripped markets, as Wall Street traders remained wary, rotating away from high-priced megacap growth stocks amid second-quarter earnings season.

Escalating trade tensions between the US and China combined with uncertainty on whether the US Federal Reserve (Fed) will go for another interest-rate cut after lowering rates in September weighed on the market sentiment, lifting the US Treasury bond yields across the curve. This, in turn, propelled the US Dollar from four-month troughs against its major currency rivals.

Markets are fully pricing in the September Fed rate cut while another cut in December is also likely, according to the CME Group’s FedWAtch Tool.

San Francisco Fed President Mary Daly participated in a ‘fireside chat’ at a conference late Thursday, noting that she is looking for more confidence that inflation is moving back to the Fed’s 2% target before calling for an interest rate cut.

Meanwhile, data on Thursday showed that US jobless claims rose to the highest level in nearly a year to a seasonally adjusted 243,000 for the week ended July 13. On the other hand, The Philly Fed Manufacturing Index jumped from 1.3 in June to an impressive 13.9 in July, reaching its highest point since April and smashing the 2.9 forecast. Mixed US economic data combined with prudent Fed commentary raised concerns on the scope of the Fed rate cuts this year.

Looking ahead, all eyes will remain on the speeches from the Fed officials, as the US central bank enters its ‘blackout period’ on Saturday before July 30-31 policy meeting. Fed policymakers John Williams and Raphael Bostic are due to speak later in the American session on Friday.  

Also, Gold traders will stay cautious, as the end-of-the-week flows will remain in play and position readjustments ahead of next week’s advance US Gross Domestic Product (GDP) data for the second quarter.

Gold price technical analysis: Daily chart

Despite the recent retracement, the bullish bias for Gold price remains intact so long as the 14-day Relative Strength Index (RSI) remains above the 50 level. The indicator is currently at 60.

The previous week’s 21-day  and 50-day Simple Moving Averages (SMA) Bull Cross also continues to lean in favor of Gold buyers.

The immediate support for Gold price is seen at the previous week’s high of $2,425. A sustained move below that level could accentuate the downside toward the 21-day SMA at $2,373.

Ahead of that, the $2,400 mark could come into play.

On the flip side, if Gold price resumes its uptrend, the previous lifetime high at $2,450 will be put to the test, above which the new all-time high of $2,484 will be challenged en route the $2,500 barrier.  

 

Bear Trend Remains Dominate

The bear trend can be expected to continue until there are signs that sentiment is starting to change. Certainly, having found support at this week at a low of 2.015 shows potential for a bullish reversal but there are no signs of it yet. Given the current price pattern natural gas would need to rise above 2.21 and stay above it for an indication of strength that may be sustainable for at least a few days. If that happens a test of the 200-Day MA as resistance is a likely target as it is also marked by several other indicators. The 200-Day line is now at 2.44.

Above 2.21 Shows Strength

A rally above 2.21 would also put natural gas well above the internal downtrend line, a sign of strengthening. That would make the higher trendline a target. Notice that the purple 20-Day MA has converged with the internal trend line, and they are identifying a similar area of price. The 20-Day line is now at 2.41. That would put the target of the 20-Day MA slightly below the 200-Day line, as it is now. There are several other indicators identifying a similar price area as the 200-Day MA. Together, they create a potential resistance zone from 2.44 to 2.62.

Minor Bullish Sign in Weekly Chart

Natural gas is about to complete its fifth week in a row with lower weekly lows and lower highs. Also, this week it is on track to close at the highest price relative to the week’s trading range. In other words, relative to the week’s range, this week is set to close stronger than the prior five weeks. Not a big deal, but rather a small indication that natural gas is seeing some support off this week’s lows.

For a look at all of today’s economic events, check out our economic calendar.

U.S. crude oil fell on Friday, but still booked a fourth straight weekly gain as falling inventories show an uptick in demand.

West Texas Intermediate hit a session high of $84.52 per barrel, the highest level since late April, before pulling back. The U.S. benchmark gained about 2% this week, while global benchmark Brent was up 0.15%.

Downtrend Line Marks First Line of Resistance

The internal downtrend line marks dynamic resistance for the current bear trend (retracement) as a rally above it will provide the first sign of strength that could lead to additional confirmation of strength. However, once today is complete, a rally above today’s high provides a short-term bullish indication. Upside follow through would then be key. Yesterday’s high was 2.21. It is fair to say that a sustainable bullish signal is not likely until natural gas rallies back above that high. That is as it stands now.

Initial Upside Target from 2.44 to 2.47

If a rally can get moving, an initial upside target for natural gas looks to be around 2.44. That begins a potential resistance zone up to 2.47, marked by several indicators. Both the 200-Day MA and 20-Day MA are at 2.44. A prior swing low support level, now potential resistance, lies around 2.47. Further, the downtrend line converges with this price area. But it doesn’t end there. The 38.6% Fibonacci retracement of the decline is within the zone at 2.45. Finally, notice that the most recent minor internal upswing caught resistance on July 9 at 2.45.

Below 2.00 Targets 1.92

Although there are reasons to suspect that the 2.02 to 2.00 price zone may continue to act as support, followed by a rally, the 61.8% Fibonacci retracement was exceeded to the downside on Monday. That opens the door to the 78.6% Fibonacci retracement at 1.92. The 2.02 to 2.00 price zone is derived from the completion of a descending ABCD pattern extended by the 161.8% golden ratio. It is anchored by a prior swing high from early-March at 2.00, which is also the top of a bottom symmetrical triangle pattern.

For a look at all of today’s economic events, check out our economic calendar.

Crude oil prices edged higher on Tuesday, June 11, after the Organisation of Petroleum Exporting Countries and its allies (OPEC+) stuck to its forecast for a relatively strong growth in global oil demand in 2024. Investors also waited for the outcome of the US Federal Reserve’s policy decision, which was due on Wednesday, June 12, as it may impact the global oil demand outlook.

Brent crude futures rose 49 cents, or 0.6 per cent, to $82.11 a barrel, continuing a sharp recovery since closing at a four-month low of $77.52 last week. That closing level was the lowest since February amid concerns of oversupply and low demand through the rest of 2024.

Also Read: Oil reports third straight weekly loss on OPEC+ verdict, delayed US Fed cuts; Brent dips 2.5% to $79: Buy or sell?

US West Texas Intermediate (WTI) crude futures gained 41 cents, or 0.6 per cent, to $78.15. Coming to domestic prices, crude oil futures last traded 0.76 per cent higher at ₹6,535 per barrel on the multi-commodity exchange (MCX).

What’s working for crude oil prices?

-OPEC maintained its 2024 forecast for relatively strong growth in global oil demand despite lower-than-expected use in the first quarter. It said travel and tourism would support consumption in the second half of the year. OPEC+ agreed to extend most of its deep oil output cuts well into 2025.

-Analysts noted that they are now at least considering the idea that maybe oil demand will pick up in the second half, and the market may actually need some additional OPEC supply after the OPEC’s demand outlook released today.

-The World Bank said on Tuesday that US economy’s stronger-than-expected performance has prompted it to lift its 2024 global growth outlook, but warned that overall output would remain well below pre-pandemic levels through 2026.

-Strong US economic data and inflation still higher than the Fed’s target have pushed financial markets to limit rate cut expectations to only two 25-basis points rate reductions this year, likely starting in September. Economists have said there was a considerable risk of only one or no rate cuts in 2024.

-The release of US consumer prices data for May and the conclusion of the Fed’s two-day policy meeting are both scheduled for Wednesday. The European Central Bank (ECB) should persist in restraining economic growth given the inflationary pressures and wait with its next rate cut until uncertainty recedes, said chief economist Philip Lane.

-If China’s producer price index (PPI) falls by two per cent or more year on year it would suggest that the deflationary risk spiral remains entrenched in China, which could result in lower demand for oil, according to analysts.

-Deflation can stifle spending as businesses and consumers delay purchases with the expectation that prices will fall, hitting economic activity and dampening oil demand. Saudi crude exports to China fell for a third straight month, pressuring prices further. US crude oil stockpiles were expected to have fallen by 1.8 million barrels in the week to June 7.

Also Read: US Fed Policy: Powell-led FOMC to hold status quo on rates over diverging trends in labour market; core CPI eyed

Where are prices headed?

WTI crude oil futures rose more than three per cent at the start of week, on expectations of higher demand. US Energy Secretary Jennifer Granholm told Reuters that US could hasten the replenishment rate of Strategic Petroleum Reserve as maintenance on the stockpile is completed by the end of the year. The expectations of rising fuel demand this summer also aids the prices, according to Kaynat Chainwala, AVP-Commodity Research, Kotak Securities.

Analysts noted that Goldman Sachs predicts that crude oil demand will surge in the third quarter due to the peak summer driving season, with Brent prices potentially testing $86 a barrel. Additionally, they foresee a global oil market deficit of 1.3 million barrels per day in the third quarter.

‘’Crude oil prices are being supported by upbeat demand estimates from Goldman Sachs. However, strength in the dollar index could limit gains. We expect crude oil prices to remain volatile. Crude oil has support at $76.70–76.10 and resistance at $77.90–78.50. In INR, crude oil has support at ₹6,410–6,360 and resistance at ₹6,560–6,620,” said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.

XAU/USD Current price: $2,453.23

• The European Central Bank left interest rates unchanged, failed to trigger action.
• Mixed United States data and an uptick in Treasury yields helped the US Dollar.
• XAU/USD eases for a second consecutive day, the bearish potential is well limited.

Spot  Gold trades with a soft tone on Thursday, hovering around its daily opening just below the $2,460 mark. The US Dollar found some demand as government bond yields pared losses and posted a modest rebound, while stock markets turned south amid a worsening market mood. Discouraging American data coupled with an uneventfull European Central Bank (ECB) monetary policy announcement, pushing investors into safety.

The ECB left interest rates unchanged as widely anticipated, while the accompanying statement showed policymakers would remain data-dependant and take decisions meeting by meeting. European officials are considering that only one more rate cut this year could be possible, as inflation remains above the central bank’s goal.

United States (US) data was mixed, as Initial Jobless Claims for the week ended July 12 unexpectedly jumped to 243K, much worse than the 230K anticipated by market players. On the other hand, the July Philadelphia Fed Manufacturing Survey improved to 13.9 after printing at 1.3 in June and beating the expected 2.9.

It is worth adding, however, that the US Dollar shows limited strength, suggesting the current advance will remain corrective.

XAU/USD short-term technical outlook  

The XAU/USD pair is under mild selling pressure for a second consecutive day, albeit barely retreating from record highs. Technical readings in the daily chart are far from suggesting a stepper decline, as indicators have barely retreated from overbought territory while lacking clear directional strength. At the same time, the pair keeps developing well above bullish moving averages, with the 20 Simple Moving Average (SMA) providing dynamic support at around $2,370.

In the near term, and according to the 4-hour chart, the technical picture is pretty much the same. XAU/USD is developing just above a firmly bullish 20 SMA, while the 100 and 200 SMAs also head higher, well below the shorter one. Technical indicators, in the meantime, pulled back from overbought readings but turned flat within positive levels, suggesting limited selling interest at the time.  

Support levels: 2,448.90 2,435.50 2,422.65

Resistance levels: 2,465.00 2,483.70 2,495.00

XAU/USD Current price: $2,453.23

• The European Central Bank left interest rates unchanged, failed to trigger action.
• Mixed United States data and an uptick in Treasury yields helped the US Dollar.
• XAU/USD eases for a second consecutive day, the bearish potential is well limited.

Spot  Gold trades with a soft tone on Thursday, hovering around its daily opening just below the $2,460 mark. The US Dollar found some demand as government bond yields pared losses and posted a modest rebound, while stock markets turned south amid a worsening market mood. Discouraging American data coupled with an uneventfull European Central Bank (ECB) monetary policy announcement, pushing investors into safety.

The ECB left interest rates unchanged as widely anticipated, while the accompanying statement showed policymakers would remain data-dependant and take decisions meeting by meeting. European officials are considering that only one more rate cut this year could be possible, as inflation remains above the central bank’s goal.

United States (US) data was mixed, as Initial Jobless Claims for the week ended July 12 unexpectedly jumped to 243K, much worse than the 230K anticipated by market players. On the other hand, the July Philadelphia Fed Manufacturing Survey improved to 13.9 after printing at 1.3 in June and beating the expected 2.9.

It is worth adding, however, that the US Dollar shows limited strength, suggesting the current advance will remain corrective.

XAU/USD short-term technical outlook  

The XAU/USD pair is under mild selling pressure for a second consecutive day, albeit barely retreating from record highs. Technical readings in the daily chart are far from suggesting a stepper decline, as indicators have barely retreated from overbought territory while lacking clear directional strength. At the same time, the pair keeps developing well above bullish moving averages, with the 20 Simple Moving Average (SMA) providing dynamic support at around $2,370.

In the near term, and according to the 4-hour chart, the technical picture is pretty much the same. XAU/USD is developing just above a firmly bullish 20 SMA, while the 100 and 200 SMAs also head higher, well below the shorter one. Technical indicators, in the meantime, pulled back from overbought readings but turned flat within positive levels, suggesting limited selling interest at the time.  

Support levels: 2,448.90 2,435.50 2,422.65

Resistance levels: 2,465.00 2,483.70 2,495.00

And what that means is that during the summertime, typically it’s pretty weak, although we did recently see a spike higher due to a massive heat wave. Well, that’s come and gone. So, at this point, the next major spike will, unless there is a massive heat wave again, probably be the fall season when Americans start to heat their homes with natural gas again. Remember, this is an American contract you are trading. It’s not European.

Joe Biden signed an executive order not too awfully long ago in the last couple of years, which bans quite a bit of exporting of liquefied natural gas, not all, but quite a bit. So that’s why Europeans don’t get as much relief from the United States as you would expect. That is expected to be lifted into Donald Trump administration. And if that’s the case, it will massively change the dynamics of this market.

But as things stand right now, it is almost solely a domestic market. So, by all means, keep an eye on the US if you want to know what’s going on here. I use it as something to trade cyclically via ETF. If you don’t have the ability to trade an ETF, a very small CFD swing position is possible here, obviously to the upside, but you have to be willing to just let it go. It’s going to have to last probably a couple months to realize its full potential.

For a look at all of today’s economic events, check out our economic calendar.

• Gold price bounces back toward all-time highs of $2,484 early Thursday.
• The US Dollar finds some solace from risk-aversion, US Treasury bond yields uptick.   
• Gold price cheers potential US-China trade risks and increased Fed easing bets.
• The daily RSI is back below 70 while firm above 50, suggesting the upside is intact for Gold price.

Gold price has found fresh demand above $2,450 in early trading on Thursday, looking to regain upside momentum, following a brief correction from a new record high of $2,484 set on Wednesday.

Gold price remains poised to claim $2,500

Wednesday’s Gold price retracement could be attributed to profit-taking after the bright metal touched its highest level on record. In the early part of the day, Gold price rallied hard, courtesy of the recent dovish comments from US Federal Reserve (Fed) policymakers and mixed US Retail Sales, which cemented an interest-rate cut in September.

Markets are fully pricing in the September Fed rate cut while odds of another cut in December stand at above 60%, according to the CME Group’s FedWAtch Tool.

Additionally, robust physical Gold demand from India and the weekend’s assassination attempt on former US President Donald Trump also played a part in lifting the sentiment around Gold price.

However, the renewed strength in Gold price early Thursday is seen on the back of simmering tensions surrounding US-China trade, which could escalate on a likely Trump presidency. Following the Trump attack, markets are speculating Donald Trump will win the US Presidential election race.

A report that the US was considering tighter curbs on exports of advanced semiconductor technology to China sent chip stocks and the Nasdaq tumbling overnight, led by AI pioneer Nvidia and Apple, per Reuters.  

The upside attempts in Gold price, however, could be capped if the US Dollar stages a decisive comeback on risk aversion. The modest rebound in the US Treasury bond yields could also act as a headwind to the Gold price advance.

On the other side, should the USD/JPY resume its downslide amid suspected Japanese forex market intervention, the US Dollar will likely follow suit, providing extra legs to the Gold price upswing.

Markets will also pay close attention to the mid-tier US Jobless Claims data and speeches from a few Fed policymakers for a fresh trading impetus in Gold price. These speeches will dictate the market expectations on the Fed interest rate outlook before the Fed’s ‘blackout period’ kicks in on Saturday.

The European Central Bank’s (ECB) policy announcements and President Christine Lagarde’s press conference will be scrutinized for the timings and scope of additional rate cuts, which could have some impact on the non-interest-bearing Gold price.

Gold price technical analysis: Daily chart

  

As noted before, the path of least resistance for Gold price remains to the upside, as the 14-day Relative Strength Index (RSI) has eased after prodding the overbought territory. The RSI indicator stays well above the 50 level, pointing to more upside in the offing.   

The previous week’s 21-day  and 50-day Simple Moving Averages (SMA) Bull Cross also continues to favor Gold buyers.

Gold price remains poised to capture the $2,500 level if the record high at $2,484 is taken out convincingly. The next resistance level is seen at the $2,550 psychological mark.  

On the flip side, if Gold price resumes correction, the previous lifetime high at $2,450 will be put to the test again, below which the $2,400 figure will come into play.  

The next relevant support levels are seen at the July 11 low of $2,371 and the $2,350 psychological levels.

 

• Gold price bounces back toward all-time highs of $2,484 early Thursday.
• The US Dollar finds some solace from risk-aversion, US Treasury bond yields uptick.   
• Gold price cheers potential US-China trade risks and increased Fed easing bets.
• The daily RSI is back below 70 while firm above 50, suggesting the upside is intact for Gold price.

Gold price has found fresh demand above $2,450 in early trading on Thursday, looking to regain upside momentum, following a brief correction from a new record high of $2,484 set on Wednesday.

Gold price remains poised to claim $2,500

Wednesday’s Gold price retracement could be attributed to profit-taking after the bright metal touched its highest level on record. In the early part of the day, Gold price rallied hard, courtesy of the recent dovish comments from US Federal Reserve (Fed) policymakers and mixed US Retail Sales, which cemented an interest-rate cut in September.

Markets are fully pricing in the September Fed rate cut while odds of another cut in December stand at above 60%, according to the CME Group’s FedWAtch Tool.

Additionally, robust physical Gold demand from India and the weekend’s assassination attempt on former US President Donald Trump also played a part in lifting the sentiment around Gold price.

However, the renewed strength in Gold price early Thursday is seen on the back of simmering tensions surrounding US-China trade, which could escalate on a likely Trump presidency. Following the Trump attack, markets are speculating Donald Trump will win the US Presidential election race.

A report that the US was considering tighter curbs on exports of advanced semiconductor technology to China sent chip stocks and the Nasdaq tumbling overnight, led by AI pioneer Nvidia and Apple, per Reuters.  

The upside attempts in Gold price, however, could be capped if the US Dollar stages a decisive comeback on risk aversion. The modest rebound in the US Treasury bond yields could also act as a headwind to the Gold price advance.

On the other side, should the USD/JPY resume its downslide amid suspected Japanese forex market intervention, the US Dollar will likely follow suit, providing extra legs to the Gold price upswing.

Markets will also pay close attention to the mid-tier US Jobless Claims data and speeches from a few Fed policymakers for a fresh trading impetus in Gold price. These speeches will dictate the market expectations on the Fed interest rate outlook before the Fed’s ‘blackout period’ kicks in on Saturday.

The European Central Bank’s (ECB) policy announcements and President Christine Lagarde’s press conference will be scrutinized for the timings and scope of additional rate cuts, which could have some impact on the non-interest-bearing Gold price.

Gold price technical analysis: Daily chart

  

As noted before, the path of least resistance for Gold price remains to the upside, as the 14-day Relative Strength Index (RSI) has eased after prodding the overbought territory. The RSI indicator stays well above the 50 level, pointing to more upside in the offing.   

The previous week’s 21-day  and 50-day Simple Moving Averages (SMA) Bull Cross also continues to favor Gold buyers.

Gold price remains poised to capture the $2,500 level if the record high at $2,484 is taken out convincingly. The next resistance level is seen at the $2,550 psychological mark.  

On the flip side, if Gold price resumes correction, the previous lifetime high at $2,450 will be put to the test again, below which the $2,400 figure will come into play.  

The next relevant support levels are seen at the July 11 low of $2,371 and the $2,350 psychological levels.

 

In a report sent to Rigzone by Fitch Group recently, analysts at BMI, a unit of Fitch Solutions, revealed their latest Brent oil price forecasts.

According to the report, the BMI analysts now expect the Brent price to average $85 per barrel in 2024, $82 per barrel in 2025, and $81 per barrel across 2026, 2027, and 2028.

A Bloomberg Consensus included in the report projected that the Brent price will average $84 per barrel this year, $80 per barrel next year, $79 per barrel in 2026, $73 per barrel in 2027, and $72 per barrel in 2028. BMI is a contributor to the Bloomberg Consensus, the report highlighted.

“This month we have held to our current forecast for Brent crude to average $85 per barrel this year and $82 per barrel the next,” the analysts said in the report.

“To meet our forecast for 2024, crude oil prices will have to average around $86 per barrel for the rest of the year, up from $83.5 per barrel in the year to date,” they added.

“In light of this, the balance of risk to our forecast lies firmly to the downside. However, we have opted not to revise our outlook at this point, but rather wait and see how price action plays out over the coming peak demand season in the northern hemisphere,” they continued.

Macro Outlook

In the report, the analysts said they find it difficult to make a straightforwardly bullish case for Brent off the back of the global macroeconomic outlook.

“Economic growth has shown greater than expected resilience in H1, but sticky inflation, delayed interest rate cuts, increased tariffs on China, and political risks associated with the U.S. presidential elections all paint a murkier picture for the second half of the year,” they said.

The analysts added, however, that there are bright spots too.

“Firstly, our economists are holding to their view that the U.S. Federal Reserve will cut its benchmark funds rate from 5.50 percent currently to 4.75 percent by year-end,” they said in the report.

“Secondly, despite the various risks the global economy faces, our economists believe that growth will remain relatively well-supported over the coming quarters,” they added.

“Thirdly, geopolitical risks remain elevated. The level of the risk premia currently being priced into Brent is extremely questionable,” they continued.

“Fourthly, the U.S. dollar could provide support to Brent,” the analysts went on to state, noting that “this is the shakiest of the arguments in our bullish case”.

Demand

The BMI analysts stated in the report that, as with the global macros, there is no clear-cut bullish case to be made for demand.

“However, there is ample data to defend our current price view,” they said.

“The strongest argument lies in our above-consensus forecasts for demand … the average growth forecast across the EIA, IEA, and OPEC sits at 1.4 million barrels per day for 2024, whereas we put growth for the year at 1.9 million barrels per day,” they added.

The analysts noted in the report that demand growth is highly concentrated, “with Mainland China and India accounting for over 40 percent of the net global increase in fuels consumption we forecast this year”.

“Chinese crude oil imports are highly volatile and import growth decelerated sharply year on year in the backend of 2023,” they said.

“However, growth has been recovering in 2024 and we expect further gains going forward, due to rising demand in the domestic transport and petrochemicals sectors, expanded oil refining capacity, and increased import quotas for private refiners this year,” they added.

OPEC+

The supply side has been generally supportive of prices and should remain so over the second half of 2024, the BMI analysts stated in the report.

“OPEC+ is maintaining its close management of the market, as evidenced in its recent decision to rollover its voluntary production curbs in their current form to the end of Q3, to extend the production cut deal until the end of 2025, and to only gradually return cut barrels to the market over the course of the next 18 months should conditions be supportive of increased supply,” they said.

The analysts added, however, that oil prices have not responded well to the news.

“OPEC+ action should physically tighten the market over the coming months, as demand rises strongly in the Middle East and GCC members are forced to meaningful curb their exports,” they analysts said in the report.

“Furthermore, the group has reaffirmed its commitment to adjust its production in response to changing market conditions and (implicitly) in support of prices,” they added.

Other Price Projections

In a research note sent to Rigzone by the J.P. Morgan Commodities Research team last Thursday, analysts at J.P. Morgan said, “summer inventory draws should be enough to get Brent back into the high $80s-$90 range by September”.

“Our price outlook calls for Brent to average $75 in 2025, sharply down from $83 in 2024, with prices exiting the year at $64,” they added in the note.

In a report sent to Rigzone last Tuesday by Standard Chartered Bank Commodities Research Head Paul Horsnell, the company projected that the nearby future ICE Brent price will average $98 per barrel in the third quarter of 2024 and $106 per barrel in the fourth quarter.

The company expects the commodity to average $109 per barrel in 2025, $128 per barrel in 2026, and $115 per barrel in 2027, according to the report.

In its latest short term energy outlook (STEO), which was released last month, the U.S. Energy Information Administration (EIA) projected that the Brent spot price will average $87.79 per barrel in 2024 and $85.38 per barrel in 2025.

The EIA’s previous April STEO forecast that the Brent spot price would average $88.55 per barrel this year and $86.98 per barrel next year.

To contact the author, email andreas.exarheas@rigzone.com