In April, the U.S. consumer price index rose less than expected, and retail sales data were also weaker than anticipated, increasing the likelihood of a Federal Reserve interest rate cut.  

Supported by a weakening dollar and a decline in U.S. Treasury yields, gold prices surged by nearly USD 30, or approximately 1.18%.  

Meanwhile, oil prices rebounded nearly 1% from a two-month low as the market weighed the positive U.S. economic data and oil inventory levels against the International Energy Agency (IEA)’s forecast of sluggish global oil demand growth. 

Gold >> 

On Wednesday, data showed that U.S. consumer prices in April rose less than expected, and retail sales data, often referred to as the “scary data,” were weaker than market expectations, increasing the likelihood of a Federal Reserve rate cut.  

Benefiting from a weakening dollar and a decline in U.S. Treasury yields, spot gold briefly surged to an intraday high of USD 2390.09, marking a near one-month high, and eventually closed up 1.18% at USD 2385.67 per ounce. 

The U.S. CPI rose 0.3% month-on-month in April, following a 0.4% rise in March, suggesting that inflation resumed its downward trend at the beginning of the second quarter, boosting financial market expectations for a rate cut in September.  

The dollar index fell 0.6%, hitting its lowest level in over a month, while the 10-year U.S. Treasury yield also reached its lowest in over a month, making gold more attractive to investors holding other currencies. 

Yesterday, gold continued its strong upward momentum from the 2350 level, exhibiting a pattern of strong oscillations. During the Asian and European sessions, it began a bullish trend, further accelerating in the afternoon to breach the 2374 level before a slight pullback.  

In the evening, before the U.S. market opened, gold prices stabilized around the 2358 level, and following the favorable CPI data, prices quickly surged, breaking through the 2378 resistance before pulling back again.  

After 10 p.m., gold prices retested and stabilized around the 2351 level, leading to a strong bullish rally that pushed prices higher. By early morning, gold prices had strongly closed above 2390. 

Technical Analysis: 

Today’s short-term strategy for gold suggests prioritizing short positions during rebounds, with long positions considered as a secondary approach during pullbacks. 

• Key resistance levels to watch in the short term are around 2405-2410. 
• Key support levels to watch in the short term are around 2375-2370. 

WTI Crude Oil >>  

On Wednesday, as the market weighed positive U.S. economic data and crude oil inventory reports against the International Energy Agency’s (IEA) forecast for sluggish global oil demand growth. 

WTI crude oil briefly fell to an intraday low of USD 76.35 but recovered all losses during the U.S. trading session, ultimately closing up 0.46% at USD 78.39 per barrel. Brent crude oil closed up 0.26% at USD 82.67 per barrel. 

Oil prices reversed direction after U.S. data showed a larger-than-expected decline in crude oil inventories and weaker inflation data, bolstering expectations of a rate cut later this year.  

The U.S. Energy Information Administration (EIA) reported that U.S. crude inventories decreased by 2.5 million barrels last week, significantly more than the 500,000-barrel decrease predicted by a Reuters poll.  

Meanwhile, the IEA lowered its forecast for oil demand growth in 2024, further widening the gap in outlook with OPEC regarding this year’s global oil demand prospects. Yesterday, oil prices exhibited a deep V-shaped recovery. During the Asian and European sessions, prices fell below the 78.8 resistance level, declining steadily.  

In the evening, before and after the U.S. market opened, prices attempted to rebound but were pressured again at the 78.2 level, falling further to break below 77, reaching a low of around 76.7 before making a deep V-shaped recovery.  

By early morning, oil prices had strongly rebounded, surpassing the early decline point of 78.8, closing with a bullish candle that indicated a recovery after a dip. 

Technical Analysis: 

Today’s crude oil trading strategy suggests prioritizing short positions during rebounds, with long positions considered as a secondary approach during pullbacks 

• Key resistance levels to monitor in the short term are around 80.0-80.5. 
• Key support levels to monitor in the short term are around 78.0-77.5. 

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