Gold Market Analysis: Thursday, July 4, U.S. Trading Session: Gold prices continued to rise during the U.S. trading session, reaching $2,357.42 with an increase of 0.06%, and peaking at $2,362 during the session. This increase followed the release of a series of weak data from the U.S., and a shift in tone from Federal Reserve Chairman Jerome Powell, which has led to increased bets that the Fed might cut rates sooner than previously expected. Another explanation for the rise in gold prices is that long-term investors have been accumulating gold in anticipation of another rally, as various geopolitical crises and macroeconomic factors are favorable for gold’s long-term outlook. The weak data from the U.S. indicates that the world’s largest economy is cooling, which has contributed to the rise in gold prices. This suggests that inflation will decrease more rapidly, increasing the likelihood of a Fed rate cut. Lower interest rates, in turn, make gold a more attractive investment, as they reduce the opportunity cost of holding non-interest-bearing assets. The minutes from the Fed’s June meeting maintained a neutral tone, emphasizing data dependence. The Fed stated that it wants to see further improvement in the inflation rate (currently at 2.7%, with recent data showing a decrease to 2.6%) and weakening overall economic data before pressing the rate cut button. This stance was expressed before Powell’s speech in Sintra, where he took a more optimistic view of declining inflation, though he still indicated that more data would be needed before making a rate cut decision. The expectation of lower interest rates is favorable for gold because it reduces the opportunity cost of holding non-interest-bearing assets. Gold has further risen due to broader geopolitical and macroeconomic factors. Ongoing conflicts in the Middle East and Ukraine, as well as political turmoil in Europe, have increased the appeal of gold as a safe-haven asset. In the U.S., Trump gained an advantage over Biden in their previous debate, increasing his chances of re-election—an outcome that could further disrupt global security and increase demand for gold. Finally, gold is viewed as the most realistic alternative for countries that cannot access dollar-denominated markets.
Today’s Gold Strategy: It is recommended to focus primarily on buying during pullbacks and selling during rebounds. Pay attention to the resistance at the 2374 level and the support at the 2344 level.
Crude Oil Market Analysis: Friday, July 5, U.S. employment and business activity data released on Friday were weaker than expected, suggesting that the U.S. economy might be cooling, which dragged down demand expectations. However, weak economic data could provide more reasons for the Fed to start cutting rates, which would support oil prices. Additionally, a significant drop in EIA crude oil inventories and large-scale attacks on northern Israel by Lebanon raised concerns about geopolitical stability. With the U.S. holiday, oil prices are likely to experience high-level fluctuations in the short term. Last week, expectations for summer oil demand were disappointed by actual consumption, leading to setbacks for bulls. The U.S. Energy Information Administration’s report showed that despite an increase in oil production and demand in April, gasoline demand fell to its lowest level since February of this year. Furthermore, the Fed’s favored inflation gauge—the PCE Price Index—was flat in May, reinforcing market expectations for an early Fed rate cut, which potentially supports oil prices. Overall, oil prices remain more prone to rise than fall.
Today’s Crude Oil Strategy: It is recommended to focus primarily on selling during rebounds and buying during pullbacks. Pay attention to the resistance at the 84.7 level and the support at the 81.7 level.
Caution: Operations should be approached with caution, and the recommendations are for reference only.
