Gold prices were largely unchanged on Thursday, even as the dollar strengthened against a basket of major currencies.
Prices had fallen 1% earlier on Thursday, but the yellow metal recovered somewhat as the day progressed.
Meanwhile, silver prices were largely unchanged from the previous close after falling sharply earlier in the day.
On the other hand, oil prices climbed more than 1% amid risk-on sentiment among investors, and as the US inventories declined last week.
Gold prices trade flat
Gold prices were largely flat as market expectations for a Federal Reserve rate cut in December diminished.
Investors were holding off on making moves until the delayed US jobs report was released later on Thursday.
The dollar index strengthened to a near two-week high, which raised the cost of gold for those holding other currencies.
“Upside momentum has fallen off to some extent, and traders don’t seem to have much bullish commitment, particularly as the US dollar has strengthened recently,” said David Morrison, senior market analyst at Trade Nation.
For the near term, key psychological levels are in focus.
Initial resistance is anticipated near $4,100, with stronger resistance at the $4,200 level. Crucially, support is established around the $4,000 mark, according to Morrison.
But a prolonged break below here could see a retest of recent lows around $3,900. For now, it’s a bit of a waiting game.
At the time of writing, the COMEX gold contract was at $4,088.46 per ounce, largely flat.
Silver
The most-active December silver contract on COMEX was 0.3% higher at $50.985 an ounce on Thursday.
Prices had fallen earlier in the day due to a stronger dollar, which limited overseas demand for the precious metal.
Silver started the week in a subdued fashion, but rallied after finding support near $49.50.
This surge pushed prices toward $52.50 on Wednesday morning, nearing the mid-October all-time high of $54.60.
However, prices abruptly reversed, and silver ended up in negative territory as European markets concluded trading.
Despite a brief recovery, prices have retraced their gains this morning.
“Overall, it’s in a similar situation to gold. The bears point to what looks like a double top on the charts, while suggests further weakness,” Morrison said.
The bulls emphasise the daily MACD, which, while it has flattened out a touch over the past week, still has upside potential.
So, it’s all about price levels. Initial support comes in around $49.50, with resistance at $52.50.
Oil rises
Crude oil prices rose on Thursday, recovering from the prior session’s drop.
The upswing was fueled by two factors: a larger-than-anticipated decrease in US crude inventories and a broader market surge across risk assets.
At the time of writing, the price of West Texas Intermediate crude was at $59.89 a barrel, up 1.1%, while Brent was at $64.14 per barrel, up 1%.
Following a roughly 2% decline in the previous session, both benchmarks saw a rebound.
This reversal came amid reports that the US is intensifying efforts to broker an end to the Russia-Ukraine conflict, including the drafting of a peace framework.
Such a development could potentially increase the supply of Russian oil barrels to the market.
Global stock markets rose on Thursday, mirroring a frequent correlation with oil prices, after investors responded positively to the AI chip leader Nvidia’s better-than-expected earnings forecast.
Separately, deadlines loom for trading with major Russian oil companies subject to US sanctions.
The window for trading with Rosneft and Lukoil closes on Friday. Furthermore, Lukoil and potential buyers for its international assets have until December 13 to finalise any agreements.
US commercial crude oil inventories dropped by 3.43 million barrels last week, according to the Energy Information Administration’s report.
This was due to a rise in crude exports (up 1.34 million barrels daily) and increased refinery run rates, which boosted crude oil inputs.
Warren Patterson, head of commodities strategy at ING Group, said:
Stronger run rates shouldn’t be too surprising, given the strength in refinery margins, while refiners are also exiting maintenance season.
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