Article by: ETO Markets
Over the week spanning March 10 to March 14,2025, the financial markets painted a tale of two contrasting trajectories for gold and crude oil, shaped by a blend of economic indicators, geopolitical developments, and evolving monetary policy expectations. Gold prices solidified their position near an all-time high, finding robust support from safe-haven demand and speculation of Federal Reserve rate cuts, while crude oil grappled with persistent bearish forces driven by supply overhangs and faltering demand prospects.
Gold has spent the week consolidating its position just shy of the $… threshold, a level that carries both psychological and historical weight. The metal’s resilience owes much to a softening U.S. economic backdrop. Data released on March 12 showed the core Consumer Price Index (CPI) rising by a modest 0.2% month-over-month, undershooting the anticipated 0.3%, while the annual CPI eased from 3.0% to 2.8%. The next day, the core Producer Price Index (PPI) surprised to the downside, falling 0.1% against expectations of a 0.3% gain. Meanwhile, initial jobless claims dropped to 220,000 from 222,000, beating forecasts of 226,000, hinting at a cooling labor market. Together, these figures bolstered speculation of multiple Federal Reserve rate cuts in 2025, pressuring the U.S. dollar—whose index (DXY) hovered around 104.00 but struggled under the weight of dovish bets—and enhancing gold’s allure as a non-yielding asset. Geopolitical currents further gilded gold’s appeal. The ongoing Russia-Ukraine conflict kept tensions simmering, while U.S. President Donald Trump’s threat of 200% tariffs on European wines and champagnes stoked fears of a broader trade war. Though a temporary exemption for Canadian and Mexican goods under the USMCA offered some relief, the specter of economic disruption reinforced gold’s safe-haven status, keeping prices elevated.
From a technical perspective, gold’s chart tells a story of cautious optimism. Having broken through the $…-$… resistance zone earlier this week, it tested the $… level before eyeing $…. Key support now lies at $… and $…; a breach below $… could see prices retreat to $… or even $…, a level that aligns with recent swing lows. On the upside, a decisive move above $2,930, if sustained, might propel gold past $…, with room to climb higher. The 14-day Relative Strength Index (RSI) at 66.75 nears overbought territory, suggesting a potential pause, but the MACD’s bullish crossover—main line at 31.45 above the signal line at 28.01—signals that upward momentum persists for now.
In stark contrast, West Texas Intermediate (WTI) crude oil languished near $… by March 14, teetering close to a three-year low as bearish pressures mounted. The commodity faced a barrage of challenges, including supply-side uncertainties, weakening demand signals, and the overhang of trade tensions. OPEC+’s signaled intent to ramp up production starting in April 2025 cast a long shadow over the market, raising concerns of an impending supply glut at a time when demand growth appears sluggish. Mixed US inventory data further muddied the waters: while the American Petroleum Institute (API) reported a drawdown, the Energy Information Administration (EIA) countered with an unexpected build, amplifying doubts about consumption trends. The International Energy Agency (IEA) added to the pessimism, forecasting a global oil supply surplus of roughly 600,000 barrels per day in 2025, a projection that weighed heavily on prices. Demand woes were compounded by broader economic uncertainties. Trump’s tariff threats against European goods heightened fears of reduced global economic activity, a scenario that could curtail oil consumption. Meanwhile, China’s lackluster recovery efforts—a critical factor given its status as a major oil consumer—further dimmed the demand outlook. Although positive developments, such as conditional support from Russian President Vladimir Putin for a US-brokered ceasefire in Ukraine, offered fleeting hope, the prevailing sentiment remained cautious, with investors fixated on the potential fallout from prolonged trade disputes.
Technically, WTI’s price behavior mirrored its bearish fundamentals. The commodity struggled to overcome the $… resistance level, which has now solidified as a key ceiling. The daily RSI lingered near 30, signaling oversold conditions, yet the downtrend line established over the past month held firm. A breach below the $… support level could accelerate declines toward $…, reinforcing the bearish case. Conversely, a decisive break above $… would be required to spark a bullish reversal, with the next resistance at $…. The upcoming US employment report, including Nonfarm Payrolls, will be pivotal. A disappointing jobs outcome could weaken the US dollar, offering oil a temporary lift, but the entrenched supply-demand imbalance suggests any rally would be short-lived.
