Gold prices fluctuated at the start of the week, attempting to climb above the $1,946 resistance level but, unfortunately, couldn't hold the ground, initiating a trend of selling that dominated the week. It's quite noticeable that gold's behaviour continues to be closely tied to the movements of the USD and US interest rates. The recent upswing in the USD, fueled by robust US data, significantly impacts gold prices. This relationship was further highlighted with the release of the encouraging services PMI data, indicating the continuous momentum of the US economy.
Despite the setbacks, gold held firmly above the $1,915 support level, hovering slightly above the 200-day simple moving average (SMA) as the week concluded. Gold is close to support, and with the 10-day moving average pointing sideways, it is hard to predict the next significant move.
This week could be volatile with vital economic announcements, namely the US inflation data on Wednesday and retail sales figures on Thursday. These could be the determining factors for gold's next big move. In the current scenario, where a strong trend is yet to be established, opting for range trading might be the wisest strategy, especially if the market shows significant shifts.
Resistance: 1946, 1984, 2000
Support: 1925, 1900, 1893, 1870, 1830
Crude oil is holding firm, seemingly unstoppable, moving closer to the $90 mark. Despite a strong USD, concerns over limited oil supplies are currently steering the market. Saudi Arabia and Russia's decision to prolong their supply cuts until year-end has speculators keen on buying, expecting supplies to remain tight heading into winter.
However, not all is rosy. China's slow post-pandemic recovery is causing some raised eyebrows, with recent economic stimulus measures not meeting expectations. Data from August has shown a dip in exports and imports, a clear sign of reduced overseas demand and cautious consumer spending.
Looking ahead, we might see a bit of profit-taking this week, as Crude couldn't hit new highs at the end of last week. Keep a watchful eye on the 10-day moving average and the $85 mark, which might offer firm support. But be ready for a possible sudden sell-off in the short term. If the price drops below $85, the $82.50 level might be your next best bet to capitalize on the medium-term uptrend.
Resistance: 90.00, 94.00, 100.00
Support: 85.00, 83.50, 78.50, 75.00, 70.00