Gold & Silver
Gold is trading above $4,065 (+1.4%) in Asian trading today as dip-buying emerges around the key $4,000 psychological level. With Brent now trading below $89/bl, a modest pullback in oil prices and renewed hopes of diplomatic efforts between the US and Iran have provided some support to bullion after recent weakness.
Markets continue to assess the inflationary impact of the Middle East conflict. Disruptions through the Strait of Hormuz and fresh tensions involving Yemen’s Houthis vowing to impose a maritime blockade on Saudi Arabia, could keep energy prices elevated, sustaining inflation concerns and expectations of tighter monetary policy. Markets are currently pricing a strong probability of a Fed rate hike by year-end, while expectations for a September hike have also increased to 64%. Higher rates and a firm dollar remain key headwinds for precious metals like gold.
Underlying demand, however, is showing some improvement. Speculative positioning in gold has risen to its highest level since early this year, while central banks purchased more than 240 tonnes in Q1, providing longer-term support despite weaker ETF demand.
From an intraday perspective, gold appears bullish. The metal has broken above the descending channel, building support around $4,000. A sustained move above $4,070 could strengthen the recovery toward $4,100, followed by $4,130, while a break below $4,000 may expose the metal to renewed downside pressure.
Silver has regained momentum, trading around $58.5 (+3.5%). Support for the metal lies at today’s low at $56.2, while resistance could be seen around $60.5.
Gold prices in the UAE are as follows:
24K: AED 488.00
22K: AED 452.00
21K: AED 433.25
18K: AED 371.50
Crude Oil
WTI Crude Oil remained highly volatile in the previous session, ending 0.76% higher, while in today’s session, at the time of writing, it is trading around $83, down 0.43%. The market continues to swing sharply as traders balance rising geopolitical tensions with hopes for a diplomatic resolution between the U.S. and Iran.
The recent price action reflects the market’s uncertainty. Reports of a potential 10-day U.S.-Iran ceasefire briefly eased supply concerns, but renewed threats from Yemen’s Houthi militants to blockade Saudi shipping in the Red Sea quickly brought geopolitical risks back into focus. Any disruption to key shipping routes, including the Strait of Hormuz and the Red Sea, could tighten global oil supplies and keep prices elevated.
Adding to supply concerns, shipping activity through the Strait of Hormuz remains limited following attacks on oil tankers while drone strikes have also disrupted exports from the Caspian Pipeline Consortium, reducing an important crude supply source for European refiners. Reflecting these risks, Goldman Sachs estimates Brent crude could rise above $120 per barrel by the fourth quarter if disruptions in the Strait of Hormuz continue.
Overall, oil prices are likely to remain highly volatile in the near term, with geopolitical headlines expected to remain the primary driver of market direction.
From a technical perspective, the intraday bias for WTI remains bullish as long as prices hold above the 9-day EMA of $79, which serves as the immediate support. On the upside, the first resistance is seen near the previous session’s high at $86, followed by $89. A stronger support level is placed around $73, marking last week’s low. Meanwhile, Brent crude is trading around $86.81, down 0.67%, with immediate support at $84.80 (last session low) and resistance near the $91 level.
