Article by: ETO Markets
In the oil market, oil prices continued their downward trend for a fourth consecutive week, despite an initial upward correction. In the US oil market, mixed signals are emerging. The Baker Hughes rig count report showed an increase in active oil rigs to 480, suggesting rising demand and a potentially tightening market. However, this was contradicted by the API weekly crude oil inventories report, which indicated a significant rise of 9.043 million barrels, surpassing both last week's increase and market expectations, highlighting an imbalance between production and demand. The EIA report also showed a larger-than-expected increase in US oil reserves, pointing to weaker demand. On the geopolitical front, US President Trump mentioned potential peace talks between Russia and Ukraine, raising hopes that an eventual resolution could lead to lifted sanctions on Russia, potentially increasing oil supply. However, the situation remains speculative, and the lifting of sanctions could weigh on oil prices if supply outstrips demand.
Gold prices (XAU/USD) traded flat during early European hours on Friday, as concerns over former US President Donald Trump’s proposed reciprocal tariffs provided support to the precious metal. Trump's plan aims to impose tariffs on countries that tax US imports, though a final decision is expected by April 1. A decline in US bond yields also contributed to gold’s stability. However, expectations that the US Federal Reserve will maintain its hawkish stance and keep interest rates higher for longer could weigh on the non-yielding asset. Meanwhile, investors are closely watching the release of US Retail Sales data for January. Economic indicators released on Thursday showed the US Producer Price Index (PPI) rising 3.5% year-over-year in January, exceeding market expectations of 3.2%, with core PPI at 3.6%. Additionally, US Initial Jobless Claims dropped to 213K for the week ending February 8, below the expected 215K, signaling continued strength in the labor market.
From a technical perspective, gold price remains in a strong uptrend on the daily timeframe, holding above the key 100-day EMA. However, with the 14-day RSI in overbought territory above 70.0, traders should exercise caution before anticipating further gains. The immediate resistance lies at the $…-$… zone, the all-time high, with a potential rally toward $… at the upper Bollinger Band and possibly $… if momentum sustains. On the downside, initial support is at $… (February 12 low), followed by $… (January 29 low), while critical support rests in the $…-$… region, aligning with the lower Bollinger Band and 100-day EMA.
West Texas Intermediate (WTI) crude oil is trading at $71.30 during the early Asian session on Friday, showing mild gains as US President Donald Trump’s tariff announcement has been delayed until April. Trump’s plan to impose reciprocal tariffs on trading partners will now undergo further study, which has alleviated fears of a trade war and provided a boost to WTI prices. According to Phil Flynn, senior analyst at Price Futures Group, the delay allows time for negotiations. Additionally, the US Energy Information Administration (EIA) reported a smaller-than-expected increase in crude oil stockpiles for the week ending February 7, with a rise of 4.07 million barrels compared to the prior week’s 8.664 million barrels. However, optimism over potential easing of Russian sanctions, fueled by talks of a Ukraine-Russia peace deal, could limit further upside in oil prices. President Trump indicated that both leaders expressed a desire for peace, leading to potential discussions on ending the conflict.
WTI crude oil's downward trend looks set to continue for a fourth consecutive week, with a bearish outlook supported by a break below the … level, now acting as resistance. The Relative Strength Index (RSI) is currently around 40, signaling bearish sentiment in the market. For the bearish trend to persist, a break below the … support level is needed, with the next target at …. Alternatively, if WTI remains within the range of … and …, a sideways bias could prevail. For a shift to a bullish outlook, a decisive break above the … resistance is required, with the next target at ….
