US economic data exceeded expectations, prompting investors to scale back their forecasts of a sharp Federal Reserve rate cut. The dollar index rose to a near six-week high, causing gold prices to briefly dip to $2,637.57 per ounce on Thursday.
However, safe-haven demand driven by escalating tensions in the Middle East provided support, balancing the pressure from a stronger dollar.
Meanwhile, concerns that the Middle Eastern conflict could disrupt global oil flows, along with a report showing OPEC’s September oil production hitting its lowest level this year, fueled a 5% surge in oil prices, marking the largest single-day gain in nearly a year.
Gold
On Thursday, US economic data exceeded expectations, prompting investors to scale back their expectations of a significant rate cut by the Federal Reserve.
The dollar index climbed to a near six-week high, causing gold prices to dip briefly to $2,637.57 per ounce. However, safe-haven demand driven by escalating Middle East tensions provided support, helping gold stabilize. Spot gold fluctuated throughout the day, eventually closing down 0.1% at $2,656.2 per ounce.
A report from the US Labor Department on Thursday showed that the labor market performed well at the end of the third quarter, reducing the urgency for the Federal Reserve to implement a significant rate cut.
Another report indicated that new orders in the services sector grew strongly, pushing September activity to its highest level in a year and a half. The dollar climbed to a six-week high, supported by solid economic data and safe-haven demand fueled by concerns over escalating tensions in the Middle East and ongoing port worker strikes.
Investors are now focused on Friday’s nonfarm payroll report.
Gold Technical Analysis:
Technically, gold saw volatile trading on Thursday, with price fluctuations as it alternated between gains and losses. During the Asian and European sessions, prices fell from the $2,657 resistance level, dipping below $2,650 before stabilizing around $2,640. In the US session, gold briefly dropped below $2,638 before rebounding and closing near $2,662.
Today’s Focus:
Today’s strategy suggests focusing on selling during rallies and buying during pullbacks.
- Resistance: $2,663–$2,668
- Support: $2,640–$2,635
Oil
On Thursday, oil prices surged by more than 5% due to fears that escalating Middle East conflicts could disrupt global oil flows, alongside a report showing OPEC’s oil production for September fell to its lowest level this year.
Brent crude futures jumped $3.72, or 5.03%, to close at $77.62 per barrel, while US crude futures surged $3.61, or 5.15%, to settle at $73.71 per barrel.
According to a Reuters survey released on Thursday, OPEC’s oil production in September fell to its lowest level of the year, mainly due to disruptions in Libya and Iraq’s improved adherence to the OPEC+ production cuts.
The survey showed OPEC’s production in September at 26.14 million barrels per day, a decline of 390,000 barrels per day compared to August, with most of the reduction coming from Libya.
Additionally, a strong US services sector report eased concerns over a potential economic hard landing, bolstering the outlook for oil demand and supporting prices. Investors will be watching the US nonfarm payroll report and rig count data, along with ongoing geopolitical developments.
Oil Technical Analysis:
Technically, oil prices found support at $70.5 and began a strong upward trend, closing at session highs amid a confluence of technical and fundamental factors supporting the bullish move.
Today’s Focus:
Today’s strategy suggests focusing on buying during dips and selling during rallies.
- Resistance: $75.0–$75.5
- Support: $72.7–$72.2
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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.
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