Oil Prices Rise and Gold Stabilizes Amid Technical Indicators and Economic Tensions

Oil prices rebound temporarily on positive technical signals, while gold remains stable supported by a weaker dollar and rising trade concerns.

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Oil Prices
OPEC
Gold

Oil Prices

Recovery Driven by Technical Indicators and China’s Market Reopening

Oil prices saw a notable rebound after falling to their lowest levels in four years, driven by technical indicators suggesting the recent decline was excessive. Brent crude rose to trade near $61 per barrel, following a nearly 10% drop over the past six sessions, while West Texas Intermediate (WTI) crude climbed to around $58 per barrel.

The rebound is partially attributed to both benchmarks entering oversold territory on the nine-day Relative Strength Index (RSI), encouraging investors to reenter the market. Additionally, the reopening of Chinese markets after a holiday boosted Asian demand for oil, further supporting prices.

OPEC

Ongoing Pressure from OPEC+ and Escalating Trade Tensions

Despite the technical rebound, fundamental challenges remain. Over the weekend, the OPEC+ alliance agreed to an additional supply increase starting in June, with Saudi Arabia warning of further hikes if certain members do not adhere to their output quotas.

This comes amid rising trade tensions between the U.S. and China, which threaten global economic growth and dampen energy demand forecasts. U.S. President Donald Trump signaled a willingness to ease tariffs on China in the future, although no direct talks are scheduled for this week.

Warren Patterson, Head of Commodities Strategy at ING, stated: “Oil is currently benefiting from temporary optimism following China’s return, but markets remain vulnerable to downside risks due to ongoing uncertainty and weak demand.”

Gold

Gold Market Holds Steady as Dollar Weakens

Meanwhile, gold prices stabilized after a sharp 3% increase on Monday, fueled by a weakening U.S. dollar. Spot gold traded near $3,325 per ounce, amid expectations that progress in U.S. trade negotiations may lead to currency market shifts, particularly in Asia.

The weaker dollar enhanced gold’s appeal as a safe-haven asset, making it cheaper for buyers using other currencies. Trump’s aggressive trade policies have also shaken investor confidence in the dollar, pushing more investors toward gold.

Gold Awaits Federal Reserve Decision

Investors are now awaiting the Federal Reserve’s interest rate decision, expected midweek. The Fed is widely anticipated to maintain current rates, despite mounting pressure from President Trump for a more accommodative stance.

It is worth noting that gold has surged over 25% this year, hitting a record high above $3,500 per ounce in April, driven by safe-haven buying amid trade tensions, speculative demand from China, and purchases by central banks. However, the price has slightly retreated over the past two weeks.

Oil Prices Rise and Gold Stabilizes Amid Technical Indicators and Economic Tensions

Oil Prices Rise and Gold Stabilizes

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