Daily Market Analysis from Investizo

[Investizo]

Fundamental analysis of XAU/USD

Gold prices (XAU/USD) are showing strength, trading at 1943.70, and have recently reached a high since early August, supported by a number of factors, including a weaker US Dollar on speculation over future Federal Reserve decisions. Over the past few days, the US Dollar Index has pared gains, consolidating at 104.05, amid mixed data on the US economy that suggests the Federal Reserve may maintain its current interest rate policy at its next meeting in September. In addition, a series of economic measures aimed at stimulating the economy of China, a global powerhouse and one of the largest consumers of gold, pushed the XAU/USD exchange rate higher. Notable measures include the government's efforts to revitalize the private sector, as well as significant adjustments such as the People's Bank of China's reduction in the required reserve ratio. In addition, some Chinese banks have adjusted RMB deposit rates. The disappointing performance of US Treasury yields over the past few weeks has contributed to gold prices, especially as the XAU/USD pair remains steady above key technical support levels. Despite the recent US dollar rally, this momentum appears to be waning, which indirectly boosts gold's appeal. However, the prospect of further rate hikes later this year could limit the dollar's decline and thus limit gold's upside.




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[Investizo]

Fundamental analysis of WTI

Benchmark US crude oil WTI - currently trading around 86.70. The recent strengthening of prices is due to a number of factors, both domestic and global. According to preliminary data from the American Petroleum Institute, U.S. oil inventories declined by 5.5 million barrels in the week ending September 1. This figure indicates supply constraints. Globally, major oil producers Saudi Arabia and Russia played a key role in influencing the trajectory of WTI. Both countries have decided to extend voluntary oil supply cuts until the end of 2023. Saudi Arabia is expected to cut production by 1 million bpd in the last quarter of 2023. On the other hand, Russia has pledged to cut production by 300,000 bpd. It is important to note that this reduction will be assessed on a monthly basis depending on changes in market conditions. Under the influence of these factors, oil futures contracts rose. With quotes trading near a nine-month high, market sentiment indicates that a short-term supply cut is imminent.





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[Investizo]

Fundamental analysis of WTI

US benchmark WTI crude oil - currently trading around 86.10. Oil prices are showing signs of a correction, especially as WTI crude has just bounced off an impressive 10-month high. Despite significant voluntary supply cuts from heavyweights such as Saudi Arabia and Russia, oil prices remained bearish. A strengthening US dollar and concerns over China's inconsistent economic recovery are the main potential factors dampening oil price gains. As the world's largest oil importer, China plays an important role in determining global oil demand. Interestingly, despite concerns about the state of the economy, China still reported a 30.9% increase in crude oil imports last month. However, the data for August does not look as optimistic, showing a decline in exports and imports. This is likely due to macroeconomic concerns related to weak domestic consumer spending.





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[Investizo]

Fundamental analysis of XAU/USD

Gold prices remained cautious on Tuesday, trading around 1919.70 as traders' attention focused on upcoming U.S. inflation data, which serves as an indicator for investors and future interest rate actions by the Federal Reserve, which hinted at further policy tightening. While the recent decline in the dollar has had a small impact on gold, making it a more attractive option for traders in other currencies, rising Treasury bond yields have limited that impact somewhat. The key to traders' strategy lies in the US consumer price index data released on Wednesday. It is considered by many to be an important indicator in determining the Fed's interest rate path in the coming months. Market rumors suggest that another interest rate hike is possible this year. The CME FedWatch tool gives a 93% probability that the Fed will maintain its current stance in September. However, between now and November, the probability of a rate hike is 41%. While the Fed is hesitant to significantly raise interest rates, it appears that the agency has yet to decide on its strategy. Gold's rise depends on a number of factors: a decrease in the Fed's aggressiveness, a drop in the dollar index and Treasury yields. However, until CPI data is released, the market is expected to remain inactive. CPI results equal to or higher than forecasts could reduce gold's upward momentum in the near term.





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[Investizo]

Fundamental analysis of XAU/USD

Gold is currently in a flurry of volatility, fluctuating under the influence of various macroeconomic indicators and general market sentiment. The gold price is fluctuating around the 1909.80 mark and is sensitive to a number of upcoming global economic indicators and decisions. One of the major factors affecting its price is the outlook for US inflation data, which plays an important role in shaping Federal Reserve policy.



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[Investizo]

Fundamental analysis of XAU/USD

The cost of gold continues its consistent decline and is trading at 1907.00. Interestingly, this pullback occurred against the backdrop of a weakening US dollar and 10-year Treasury bond yields, which usually support gold prices. The decline in gold prices is attributed to the latest US inflation data, which points to the possibility that the Federal Reserve will pause its interest rate adjustments next week. Digging deeper into these numbers, the Labor Department found that U.S. core inflation rose at an annualized rate at its lowest in nearly two years, hinting at the possibility that the Fed may pause interest rate hikes. In contrast, August marked the largest increase in U.S. consumer prices in 14 months, with a significant contribution from a sharp rise in gasoline prices. With such conflicting indicators, the market faces uncertainty about the Fed's interest rate direction in 2024, which has a significant impact on gold's volatility. Despite gold's historical appeal as a safe haven, the world's largest exchange-traded fund, the SPDR Gold Trust, saw its holdings fall 0.3%. This slowdown, reflecting falling demand, coincided with a strengthening US dollar, reinforced by inflation data. For investors trading in other currencies, the strong dollar drove up the price of gold. However, while the CPI data was largely in line with market forecasts, it suggested that the Federal Open Market Committee may maintain current levels, which would provide temporary support to prices. Given recent economic developments, market forecasts suggest that the Fed will leave interest rates unchanged at its next meeting. Rising interest rates traditionally increase the attractiveness of US Treasuries, making them preferable to underperforming assets such as gold. As a result, precious metals investors are shifting their concerns from inflation to the opportunity cost of owning gold in a rising interest rate environment. On the contrary, during Thursday's Asian session after the release of the U.S. Consumer Price Index data, gold showed a slight recovery and consolidated at 1910.00.





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[Investizo]

Fundamental analysis of WTI

WTI crude oil prices are trending higher and have reached their highest level since November 2022 at 90.57. This increase is due to a number of factors pointing to the prospect of higher oil prices in the near future. Chief among these factors is China's strong economic performance. Industrial production and retail sales figures for August were better than expected, indicating a consistent recovery from the COVID-19 pandemic. This strong economic performance complements China's record refinery throughput, which reached 64.69 million tons in August, up 20% year-on-year. This increase can be attributed to high tariffs imposed during the summer tourist season and favorable profit margins on exports to other Asian consumers. Major oil producing countries such as Russia and Saudi Arabia have decided to cut production. Such measures have raised fears of a looming supply shortage, especially in light of last month's OPEC+ resolution and the International Energy Agency's forecast of a market deficit throughout the fourth quarter as Saudi Arabia and Russia extend oil production cuts. Looking ahead, Saudi Arabia's oil production is expected to be at 1.3 million barrels per day during the period. Underpinning this sentiment, OPEC is optimistic about Chinese oil demand through 2023 and forecasts significant growth in global oil demand in 2023 and 2024.



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[Investizo]

Fundamental analysis of XAU/USD

Gold (XAU/USD) is trending higher and is trading at 1928.50. This rally has been boosted by December gold futures, which rose by 4.70 USD. This uptrend coincides with the weak sentiment in Asian equities, while precious metals are being strengthened by a range of global factors. The US Federal Reserve's next monetary policy meeting remains a top priority. Most expect the Fed to leave interest rates unchanged, but market speculation still points to the possibility of a 25 basis point rate hike in November or December. However, the resilience of the U.S. labor market, controlled inflation and rapid economic growth paint a picture in which the Fed could signal a soft landing for the economy. At the same time, the recent depreciation of the dollar based on recent US data has made gold more accessible to those trading in alternative currencies, making spot gold significantly more expensive each week.







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[Investizo]

Fundamental analysis of WTI

WTI crude oil prices continued their strong upward trend for the fourth consecutive day, trading at 91.20. This rise is likely due to a combination of factors: a significant decline in US shale oil production and continued supply cuts initiated by Saudi Arabia and Russia. US oil production is forecast to end October at 9.4 million bpd, the lowest since May 2023. The figure is boosted by promises from Saudi Arabia and Russia to extend production cuts of 1.3 million bpd through the end of 2023. There could be a shortage in the market. However, the future of the oil market has many conflicting opinions. The market has emphasized resilience and minimized the idea that oil demand is about to peak. This optimism is reflected in OPEC's forecast that demand will reach 102.1 million barrels per day this year, a more positive outlook than that of the International Energy Agency.







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[Investizo]

Fundamental analysis of XAU/USD

On Wednesday, gold prices are holding near 1930.00.Public opinion believes that the Fed will maintain current interest rates, but concerns are growing about the possibility of an interest rate hike later this year. Treasury yields remain stubbornly high, suggesting that the market expects a hawkish but passive stance from the Fed. The complexity of the outlook is compounded by rising oil prices and comments from Treasury Secretary Janet Yellen, who emphasized the need to adjust U.S. economic growth and potential interest rates to achieve the inflation target. This economic situation suggests that interest rates may continue to rise over time. The Fed's tightening stance could put downward pressure on gold prices, especially in light of recent U.S. economic data releases.





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[Investizo]

Fundamental analysis of WTI

US WTI crude oil prices declined on Monday, mainly due to the Fed's stance making oil markets wary, as evidenced by the drop in oil contracts last week after a three-week rise. These changes are mainly due to concerns about oil demand in the face of possible interest rate hikes.



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[Investizo]

Fundamental analysis of XAU/USD

XAU/USD prices declined on Tuesday, dropping to the 1910.50 support level mainly due to the strengthening US dollar, which recently hit its highest level in 2023, and rising US Treasury yields.





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[Investizo]

Fundamental analysis of XAU/USD

The value of gold (XAU/USD) has been trending lower of late, trading at 1897.10, and this decline has been exacerbated by the continued strength of the US dollar (USD) for the first time in 10 months.
The dollar's strong performance was in response to the Federal Reserve's warning that interest rates could remain high for an extended period. The move was driven by market expectations that the Fed would continue to raise interest rates, especially with inflation exceeding the Fed's 2% target. Inflation concerns were underscored by statements from officials such as Chicago Fed President Austan Goolsbee, who argued that inflation above a certain threshold posed a greater threat than monetary policy measures.



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[Investizo]

Fundamental analysis of WTI

WTI crude oil prices, trading around 91.05, have weathered a whirlwind of factors affecting their recent trajectory. A notable surge in Chinese demand during the Golden Week holiday, marked by a 20% increase in domestic flights compared to 2019, and positive Chinese refinery activity hints at a possible surge in the oil market. This momentum from China comes against a backdrop of tight oil supplies in the US, highlighted by inventories at the Cushing storage facility reaching their lowest level since July 2022. Despite robust economic growth in the US indicating continued fuel demand, a potential market deficit of more than 2 million bpd is expected in the coming quarter.



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[Investizo]

Fundamental analysis of WTI

Oil prices began consolidating at 89.65 this week, reversing the previous Friday's decline, thanks in part to avoiding a U.S. government shutdown. Prices for these benchmarks rose nearly 30% in the third quarter, helped by an expected supply shortage in the fourth quarter and prolonged supply cuts from countries such as Russia and Saudi Arabia. In particular, according to inside information, the OPEC+ group, which includes the Organization of the Petroleum Exporting Countries, Russia and its allies, is expected to stick to its current policy of cutting oil production. Despite global supply issues, U.S. oil production is nearing pre-pandemic highs. U.S. fossil fuel production is rising to fill the demand gap created by long-term production cuts by Saudi Arabia and Russia. Texas, the largest producer of shale oil, saw record production of 5.6 million barrels per day in July.



https://investizo.net/markets/analytics/25791-fundamental-analysis-of-wti

 

[Investizo]

Fundamental analysis of XAU/USD

Fundamental analysis of XAU/USD shows a bullish trend supported by a combination of geopolitical tensions, economic indicators and market expectations. Gold prices remain strong, holding above $2025 and near $2060/oz, reflecting its dual role as an inflation hedge and safe-haven asset. Rising international tensions, especially the ongoing conflict between Israel and Hamas and the US military campaign in Yemen, have reinforced this trend. This geopolitical crisis is forcing investors to choose safe-haven assets, thereby boosting gold prices.





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[Investizo]

Fundamental analysis of WTI

The WTI crude oil market is currently operating in a challenging environment influenced by strong OPEC demand forecasts, geopolitical risks, US inventory differentials, monetary conditions, production changes and alternative views on future oil demand.





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[Investizo]

The recent gold price dynamics reflects the complex interplay between economic indicators and market sentiment: the price moves in response to changes in the US economic indicators and Federal Reserve policy expectations.

After a strong break of the 2000.00 support level and a further decline to 1984.20, gold prices rose on the back of a sharp fall in US retail sales in January, the largest monthly decline since February 2023, and a drop in jobless claims, a sign that the labor market is strong, reflecting a robust economy. These factors, along with a weaker dollar and falling government bond yields, are making gold more attractive to international investors.

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[Investizo]

Fundamental analysis GBPUSD for 21.02.2024



The current analysis of GBP/USD shows that the price movement has no clear direction, as economic conditions in the US and UK show uncertainty, as do expectations related to central bank policies and economic data releases.

Sterling failed to hold gains despite hitting a weekly high near 1.26800, which was particularly influenced by comments from Bank of England officials. Governor Andrew Bailey said market expectations for a rate cut were not "unreasonable" and pointed to signs of easing price pressures, but did not say when or how much policy adjustments would be made. Deputy Governor Ben Broadbent and Policy Director Swati Dhingra also attended the meeting, emphasizing the shift in focus from the scope to duration of restrictive monetary policy and warning of the negative effects of high interest rates on the economy. Analysts argue that interest rate cuts are urgently needed to avoid long-term economic damage, but concerns remain about the impact of continued tight monetary policy on UK economic growth.



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[Investizo]

Fundamental analysis WTI for 26.02.2024



While the global oil market is under pressure and uncertainty, the price of WTI crude oil fell and reached 76.00.

The main reason for this fall is the increase in interest rates around the world, which limits economic activity and, in turn, reduces oil consumption and decreases demand. Federal Open Market Committee meeting minutes and hawkish comments from Fed officials point to concerns about continued inflationary pressures, lower short-term interest rates and the need to keep debt payments on hold. These ideas traditionally and naturally lead to lower oil prices.

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