Gold is trading near $4,395 (+0.9%) after recovering from a three-day decline, with a weaker US dollar providing some support to bullion. The dollar has come under pressure as the Japanese yen strengthened on expectations of further Bank of Japan tightening, improving the appeal of dollar-denominated gold.
However, the broader environment remains challenging as renewed Middle East tensions have pushed Brent crude closer to $100 a barrel, keeping inflation concerns elevated. Markets are pricing in about a 60% chance of a Fed rate hike this month, making this week’s US CPI data particularly important. A softer inflation reading could ease rate-hike expectations and weaken the dollar, further supporting gold, while an upside surprise could put significant pressure on the metal.
Investor positioning has also turned more cautious, with speculators reducing long positions and ETF demand softening in recent weeks. Nevertheless, continued central-bank demand and longer-term portfolio diversification remain supportive factors for gold in the medium term.
Technically, gold retains a cautiously bullish bias for the day while holding above the 100-day SMA near $4,360. Immediate resistance is seen at $4,410, followed by $4,430. Support lies around $4,335, a previously tested level. A sustained break above $4,430 would strengthen the bullish outlook, while a break below $4,330 could signal deeper downside. Silver’s outlook remains similar to gold, as the metal trades above the 50 SMA while trying to recapture the 20 SMA at $66.60. Support for the metal lies around $65.60, while resistance could be seen near the 100-SMA at $67.50.
Gold prices in the UAE are as follows:
24K: AED 528.00
22K: AED 489.00
21K: AED 468.75
18K: AED 401.75
Crude oil prices continued their upward trend on Tuesday, with WTI prices up by 1.59% and Brent up by 1.88% by the close. Both instruments looked strong during Wednesday’s Asian session, with WTI trading 0.53 higher and Brent trading 0.78% higher, now above the $101.50 mark.
In geopolitical updates affecting oil markets, the US struck Iranian tankers near the Kharg Island export hub (responsible for around 90% of the country’s crude exports) and in the Gulf of Oman, destroying five tankers carrying crude in response to attempts to hit a US Navy warship with ballistic missiles. In retaliation, Tehran responded by firing missiles at Jordan and warning ships in the Persian Gulf to abandon their vessels. The renewed tensions follow the attacks on energy facilities in Saudi Arabia, which have halted operations and brought Brent back above the $100 mark. Separately, Chinese buying is picking back up, helping to tighten the global oil market and boost prices for some grades. The pickup marks a reversal from recent months, when refiners tapped ample inventories to limit imports and shield themselves from soaring prices. Meanwhile, Iraq, the second-biggest producer in OPEC, is seeking to significantly increase the country’s oil production. The country wants future targets to be calculated from a baseline of 6 million barrels a day, following a hint in June that it could quit the group if denied a high baseline, potentially capping significant upside for oil prices.
From a technical perspective, WTI continues to trade near its $94.49 resistance level from the highs of 23rd July. Although prices went above it intraday in yesterday’s session, a sustained close above the level is still needed to confirm a bullish breakout. However, momentum remains tilted towards the upside with RSI near 67 on the daily, just shy of overbought territory. Brent’s rise is also significant; however, $102.29 remains near-term potential resistance, and a break above it could reinforce the bullish narrative.
