- Crude Oil
In yesterday’s session, oil rallied by almost 4%, settling at $63.27 for the day. This was mainly driven by the worst fears of significant output increases not materializing as expected. On the geopolitical front, Russia and Ukraine completed a second round of talks in Istanbul, which did not bring them closer to ending the war. These tensions indicate limited supply from Russia and Iran. Moreover, wildfires in Alberta, Canada, have halted nearly 350,000 daily crude production barrels, representing approximately 7% of the nation’s output. These factors stand bullish for oil in the near term. Nonetheless, WTI oil prices have experienced a decline of 14% year-to-date, as OPEC+ has discontinued its prior strategy of sustaining elevated prices through output reductions, alongside concerns regarding trade wars impacting demand.
Today, WTI oil is down by 0.35% at $63.05 due to the strengthening dollar. The daily RSI is declining from oversold levels, which indicates a deceleration in momentum. However, the prices still stand at a support of $62.94, above the 9 and 21 day SMA of $61.93 and $61.74 respectively. On the 4-hour timeframe, the price remains in a consolidation phase and has honored the strong resistance at $63.4, forming a rectangle that connects the lows of $60.6 since May 15. It’s crucial to monitor the resistance level at $63.4, as a breakout and close above this level may signal the end of the price consolidation. Meanwhile, Brent is also down today by 0.25% trading at $64.63
- Gold
Gold prices rallied by 2.80% on Monday to close on a 4-week high, creating almost a bullish marubozu candle on the daily chart, indicating the strength of it’s breakout from a downward sloping trendline connecting the highs of 22nd April at $3500, 6th May at $3435, and 23rd May at $3366. Additionally, prices found support at the 21-day EMA around the $3296 level and rose thereafter over the previous high of 23rd May at $3366. Prices in Tuesday’s early session are down 0.50%, now re-testing the breakout level around $3364, with a close 9-day EMA support at $3354, followed by $3330 from the highs of 29th May.On the fundamental front, although the bullion prices faced pressure today, with a rising US dollar, the downside remained limited as investors reacted to escalating trade tensions. Markets await the deadline for various countries to submit their best trade offers to Trump’s administration, which coincides with the double tariffs on imported steel and aluminium this Wednesday, leading to uncertainty regarding what will actually be implemented. Moreover, the US President Donald Trump is scheduled to meet Chinese President Xi Jinping this week, days after reviving fears of a trade war with Trump accusing China of violating its trade agreements. On the geopolitical front, the Russia-Ukraine peace talks, following Ukraine’s recent drone strikes, ended without a significant breakthrough, leading to heightened risks of a prolonged war. These factors weighed in on investors’ sentiment and continued to add price tailwinds, supporting the safe-haven demand for Gold.Gold prices in the UAE are as follows –24 Carat – AED 405.2522 Carat – AED 375.2521 Carat – AED 359.7518 Carat – AED 308.50
