Market Recap
On Monday, spot gold traded near $4,362/oz, rebounding to a new record high of $4,381.29/oz as expectations for further Fed rate cuts and strong safe-haven demand persisted. The U.S. Senate’s 11th attempt to pass a funding bill once again failed, extending the government shutdown into its 20th day, while investors awaited new trade talks and this week’s U.S. inflation data.
Meanwhile, U.S. crude traded around $56.92/bbl, closing at its lowest level since early May as markets weighed the risk of a global supply glut amid escalating trade tensions and fears of slower energy demand.
Gold
Gold prices rose more than 2% on Monday, supported by expectations of further Fed easing and renewed risk aversion ahead of key inflation data and trade negotiations later this week.
Jeffrey Christian, Managing Partner at CPM Group, said: “Political and economic uncertainty has fueled gold’s rebound after Friday’s sharp drop. We wouldn’t be surprised to see prices reach $4,500/oz soon.”
The U.S. government shutdown has now entered day 20, with the Senate failing for the 11th time to break the deadlock. The shutdown has delayed key economic reports, leaving investors and policymakers in a “data blackout” ahead of next week’s Fed meeting.
The long-delayed CPI report is now expected Friday. Traders currently assign a 99% probability of a 25 bps cut next week and see another reduction in December as almost certain.
Gold Technical Outlook:
Gold fluctuated below $4,270 through most of the day but surged higher during the U.S. session as safe-haven flows returned. With gold decisively breaking above $4,270, the short-term trend remains strong. The pattern resembles previous rebounds, quick corrections followed by renewed buying momentum. Traders are advised to stay patient and look for retracement entries aligned with the broader bullish bias.
Today’s Gold Outlook:
- Strategy: Buy on pullbacks, sell on rebounds
- Resistance: $4,380 – $4,400
- Support: $4,320 – $4,300
Crude Oil
Oil settled at its lowest since May, pressured by worries over a supply surplus and weaker global demand amid worsening trade tensions.
The Brent futures curve has shifted into contango, where near-term contracts trade below longer-term ones, signaling expectations of oversupply and encouraging storage. The structure, last seen in May, returned last week for the first time since late 2023, with U.S. crude following suit on Friday.
John Kilduff, partner at Again Capital, said: “Oversupply fears are sweeping through the market, especially looking ahead to 2026. We’re seeing floating storage and onshore tanks filling fast, a truly bearish setup we haven’t witnessed in years.”
Technical outlook:
Oil remains in a medium-term downtrend, with MACD lines diverging below zero and bearish momentum intact. Short-term charts show support near $56.10/bbl, but the overall bias remains negative. After a mild rebound, oil is expected to resume its downward trend.
Today’s Outlook:
- Strategy: Sell on rebounds, buy on dips
- Resistance: $58.5 – $59.5
- Support: $55.5 – $54.5
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