Week 30 data: oil and gold price review for the week ahead

23 July 2024

Antreas Themistokleous

Exness trading specialist

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This preview of weekly data looks at USOIL and XAUUSD where economic data coming up later this week are the key market drivers for the near short-term outlook.

The most important economic data for this week are: Bank of Canada interest rate decision, US GDP growth and PCE index

Wednesday:

  • Bank of Canada's Interest rate decision

Thursday:

  • US GDP growth

Friday:

  • US core PCE price index

USOIL, daily

oil chart week 30

Oil prices rose slightly after a significant drop following President Joe Biden's decision not to seek reelection. The dollar's decline also benefited commodities priced in the currency, including oil, as concern mounted over Biden's reelection prospects and his endorsement of Vice President Kamala Harris. This decision is raising concerns about political stability and its impact on oil markets. Wildfires in Canada are threatening oil production while the decline in the US dollar has benefited commodity prices. In addition, the commitment of traders report is showing commercial traders being near the yearly low possibly hinting that a correction move down might be imminent to get the interest of big players back. 

On the technical side, the price is testing the support level around the lower band of the Bollinger bands after a massive correction late last week. The Bollinger bands have expanded showing that volatility is building up in the market for crude oil while the faster moving average is trading above the slower one validating the overall bullish trend. The stochastic Oscillator is in the extremely oversold level for the past 4 sessions possibly hinting at a correction move to the upside in the near short term. If this correction actually takes place then the first area of resistance might be around the $80 price area which comprises the psychological resistance of the round number and also just above the 38.2% of the daily Fibonacci retracement level and the 50-day moving average. 

Gold-dollar, daily

Gold prices firmed as the dollar eased after US President Joe Biden withdrew from the 2024 presidential race, leading investors to turn to gold as a hedge against political and market uncertainty. Analysts expect gold to reach another record high before the end of 2024 because of potential rate cuts and political instability in the US Trump's promise of corporate tax cuts and interest rate reductions, as well as his tough stance on trade, could lead to inflationary tariffs and greater geopolitical tensions, benefiting gold. Gold prices hit an all-time high last week on increased chances of US interest rate cuts.

From a technical point of view, the price has retraced from the new all-time high of last week down to around $2,400. The recent bearish correction has also pushed the Stochastic oscillator back to neutral levels and the moving averages to close in on each other but with no crossing just yet. The Bollinger bands are still quite expanded indicating that volatility for the yellow metal is still high. recently faced enough resistance on the upper band of the Bollinger bands and has lost some bullish momentum causing a sideway move in the last couple of sessions. Currently, the price is testing the resistance of the 38.2% of the daily Fibonacci retracement level after a failed attempt to break above it in the latest session.

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