Weekly Data: Oil and Gold Price Overview for the Upcoming Week
The upcoming week promises to be a significant one for traders and investors, with key economic data releases set to drive market movements for USOIL (US Crude Oil) and XAUUSD (Gold) prices. These data points will be crucial in shaping short-term outlooks and providing insights into the current market trends.
Key Highlights for the Week
The following economic events are expected to impact the oil and gold markets in the upcoming week:
Tuesday
On Tuesday, the Reserve Bank of Australia (RBA) will announce its interest rate decision at 04:30 GMT. Market expectations are for the rates to remain unchanged at 4.35%. Any unexpected rate cut by the RBA could lead to minor losses for the Australian Dollar in the short term.
Thursday
Thursday will see the release of the US GDP growth for the second quarter at 12:30 GMT, with a projected doubling to 3%. Meeting or exceeding these optimistic expectations could strengthen the US Dollar but potentially harm instruments traded against it.
Friday
The S-Core Personal Consumption Expenditures (PCE) data will be released at 12:30 GMT on Friday. The market anticipates a stable figure of 0.2% compared to the previous month. Any surprises at the time of release are likely to cause volatility in most Dollar pairs.
Monday
The National Bureau of Statistics (NBS) Manufacturing Purchasing Managers’ Index (PMI) will be published at 01:30 GMT, with an expected increase to 50 points. The NBS focuses on larger state-owned enterprises, and a reading above 50 indicates potential growth in the manufacturing sector, which could impact production-related products like oil, natural gas, silver, etc.
Additionally, the Caixin Manufacturing PMI at 01:45 GMT is projected to rise by 0.6 points to 51 in September. This index focuses on the export sector and small to medium-sized enterprises. A value below 50 would suggest that these businesses have not fully recovered, potentially affecting prices of production-related instruments.
USOIL Overview
Oil prices stabilized after experiencing their largest weekly increase of the year due to a weaker Dollar and concerns over escalating tensions between Israel and Hezbollah. The attacks on Israel by Hezbollah raised fears of potential disruptions in oil supply from the region, which produces a third of the world’s oil.
Stimulus measures to boost economic growth in China, including interest rate cuts, drove buyers into US stocks. Brent’s recent 9% rally was fueled by expectations of US interest rate cuts. However, rising diesel prices and trade tensions between the US and China have capped gains. Oil prices may fluctuate within a range before breaking lower, with a focus on demand concerns preceding the supply crisis.
From a technical perspective, the price has experienced a sharp decline to around $70, pushing the stochastic oscillator into extremely overbought territory. This suggests a potential bearish correction in the coming sessions as a new catalyst emerges in the market. The 50-day moving average is significantly below the 100-day moving average, confirming an overall bearish trend despite recent minor upward movement.
Gold Overview
Gold prices hit a record high on Monday, driven by a weaker US Dollar and expectations of further Federal Reserve interest rate cuts. The prospect of more rate cuts supports gold prices, while geopolitical tensions in the Middle East increase demand for gold as a safe haven asset.
The release of US PMI data, which could strengthen the Dollar if it exceeds expectations, may influence the short-term trajectory of gold prices. The historical significance of gold, increased central bank reserves, and its inverse correlation with the US Dollar are key factors affecting price movements. Analysts predict that forced short position liquidation and rising bond yields could push gold prices to new historic highs.
Technically, the price reached a new all-time high above $2,600 and repeatedly tested the upper band of the Bollinger Bands, closing above it last week. The expanded Bollinger Bands indicate increasing volatility, suggesting that the stochastic oscillator could remain in extremely overbought territory for an extended period. The moving averages confirm the overall bullish trend in the gold market, with no significant signs of a trend reversal in the near future.
In conclusion, the upcoming week holds several key economic events that will likely impact oil and gold prices. Traders and investors should closely monitor these data releases to make informed decisions in the volatile financial markets.