Gold Market Analysis
On Tuesday, gold prices surged to around $2,627.44, marking their best annual performance since 2010. This was driven by robust central bank purchases, geopolitical tensions, and accommodative monetary policies by major global central banks. At the time of writing, spot gold rose by 0.64% to approximately $2,624. Over the past six months, gold prices reached historical highs and have risen about 26% year-to-date in 2024. Meanwhile, the U.S. Dollar Index remains at 108.06, near the two-year high reached earlier this month. The index has gained 6.6% in 2024 as traders scaled back bets on significant rate cuts next year. The dollar showed strength on the last trading day of 2024 and is expected to post robust gains against most currencies in 2025 as investors prepare for reduced U.S. rate cut expectations and policies under the Trump administration. On Wednesday (January 1, Beijing time), the New Year holiday left most markets closed, leading to thin trading. Gold prices surged by over 27% throughout 2024, the largest annual increase since 2010, driven by safe-haven demand and central bank rate cuts. However, market sentiment could turn more cautious as investors focus on potential policy changes during Trump’s second term. Analysts believe the factors supporting gold prices in 2024 may persist into 2025. However, potential headwinds could emerge from inflation triggered by Trump’s policies, which may slow down the Federal Reserve’s rate-cutting pace. At the time of writing, spot gold was up 0.71%, trading at $2,624.08 per ounce. Analysts expect gold’s strong performance to continue into 2025 but note that shifts in U.S. policies may pose challenges.
Gold Strategy Trading for Today:
Primary Approach: Buy on dips during pullbacks.
Secondary Approach: Sell on rallies at resistance levels.
Key levels to watch: Resistance: $2,650 Support: $2,620
Crude Oil Market Analysis
On Tuesday (December 31), U.S. crude oil prices rose during the U.S. session, trading around $71.85 per barrel. Data from the U.S. Energy Information Administration (EIA) on Friday showed a decline in U.S. crude oil inventories by 4.2 million barrels for the week ending December 20, driven by increased refinery activity and holiday-season fuel demand. Analysts surveyed by Reuters had anticipated a decline of 1.9 million barrels. According to the American Petroleum Institute (API) on Tuesday, U.S. crude inventories dropped by 3.2 million barrels last week. Fuel distributor TACenergy noted that several events impacting supply next year occurred recently, bringing the Russia-Ukraine conflict back into focus. Previously, the conflict had become a secondary factor due to stagnating global oil demand. Meanwhile, wholesale gas prices in the Netherlands and the U.K. rose as hopes of a new agreement for Russian gas transit through Ukraine dimmed. Crude oil prices are heading for a yearly decline, with trading in a narrow range since mid-October. The market remains affected by both bullish and bearish signals, including ongoing hostilities in the Middle East and concerns over demand from the world’s largest oil importer.
Crude Oil Trading Strategy for Today:
Primary Approach: Sell on rallies at resistance levels.
Secondary Approach: Buy on dips during pullbacks.
Key levels to watch: Resistance: $73.3 Support: $70.3
Caution is advised, and the strategies are for reference only.
