Daily Market Analysis from Investizo.com

[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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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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