Morning Analysis: Gold and Oil Strengthen, Eyeing Record Highs

Gold Market:

Gold continued to maintain its strong momentum overnight, with prices approaching historical highs, and there is a possibility of setting new historical records in the short term. At present, the monetary policy path of the Federal Reserve has become increasingly uncertain, which has increased financial market uncertainty in the short term, and the market may increase its holdings of safe-haven assets such as gold.

Last week's higher-than-expected CPI data in the United States disrupted market sentiment, and the future path of interest rate cuts by the Federal Reserve has become unclear. There is a popular term within the Federal Reserve called "gradual interest rate cuts," which is a more neutral policy but may not solve the problem.

If the Federal Reserve does not cut interest rates enough or if the pace of rate cuts is too slow, the U.S. debt issue will emerge. Currently, U.S. debt has exceeded $34 trillion, and this year's fiscal deficit will reach $1.8 trillion, which will undoubtedly greatly damage the credit of the U.S. dollar and promote the process of global de-dollarization, from which gold will also benefit.

Technical Analysis: Gold's daily chart closed with a small positive line with a long upper shadow, indicating clear resistance at the previous high. The 4-hour cycle closed with a stop-rising K-line combination, and there is a high probability of a pullback within the day. For short-term long positions, consideration can be given to the $2662 level.

Crude Oil Market:

Crude oil performance remained weak overnight, mainly characterized by horizontal consolidation, but there are signs of deterioration in the fundamentals of crude oil, which may lead to long-term low oil prices, especially against the backdrop of reduced threats to crude oil production from geopolitical risks in the Middle East.

The International Energy Agency's latest forecast suggests that as humans begin to use electricity more, there will be an oversupply of oil and natural gas, and the world is entering an era of cheaper energy prices. By 2030, global demand for all fossil fuels will stop growing, which means that a truly irreversible inflection point is approaching.

Israeli Prime Minister Netanyahu has approved a series of retaliatory targets for Iran's missile attacks on Israel earlier this month. According to the White House, the targets are mainly military facilities in Iran and do not include oil and natural gas production facilities, thus not touching the red line previously set by Iran.Technical Analysis: Crude oil closed a small bullish candle on the daily chart, which is likely an adjustment to correct the excessive deviation, but the downtrend remains unchanged. There is a high probability that a continuation pattern is forming on the 1-hour cycle, indicating significant short-term downward pressure. For intraday short positions, one can pay attention to the resistance level of $71.30.