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CFD Markets News and Forecasts — 08-10-2023
- WTI Crude Oil prices rally hard at the start of the week on renewed Middle East conflict.
- Worries that the Israel-Palestine war could extend into other regions, underpin Oil price rally.
- OPEC+ pledge for voluntary cuts also supports the Oil-price upsurge.
West Texas Intermediary (WTI) Crude Oil price is jumping over 4% to its highest level in three days, briefly recapturing the $85 mark in the Asian session on Monday.
The extended rebound in Oil price comes on the heels of the escalating Middle East conflict between Hamas and Israel and concerns over its potential impact on global oil supplies.
Over the weekend, Gaza-headquartered Hamas militant group militarily attacked Israel and in retaliation Israel declared war on Gaza, launching airstrikes on the Hamas enclave.
Markets fear that the Hamas-Israel conflict could spread into other Middle East regions. Iran, a major oil producer and key backer of the Hamas group could come in their support, threatening a shutdown of the Strait of Hormuz, the vital shipping artery and the only sea passage from the Persian Gulf to the open ocean.
Meanwhile, Oil price is also finding demand early Monday after Bahrain, Iraq, Kuwait, Oman, Saudi Arabia and the United Arab Emirates reaffirmed their commitment to "collective and individual voluntary adjustments" to oil production, the Saudi state news agency said on Sunday.
In the previous week, OPEC and its allies (OPEC+) agreed in June to extend voluntary oil cuts first introduced in April until the end of 2024.
WTI: Technical levels to watch
- Gold price cheers risk-aversion on Middle East violence, briefly regains $1,850.
- The US Dollar rebound limits the Gold price advance while US Treasury bond yields drop.
- Gold price eyes a sustained rebound and critical US Nonfarm Payrolls data.
Gold price is building on Friday’s rebound, briefly recapturing the $1,850 barrier early Monday. Escalating geopolitical tensions in the Middle East are spooking markets, as they seek safety in traditional safe havens such as Gold price, the US Dollar, Treasuries etc.
Renewed geopolitical risks came to the fore after the Hamas militant group in Gaza, Palestine, militarily attacked Israeli towns in an unprecedented move. In response, Israel launched airstrikes on Gaza and declared war against the Palestinian enclave of Gaza on Sunday.
Gold price is also capitalizing on worries that the geopolitical conflict could risk a fresh upsurge in oil price, threatening global inflation and economic outlook. Oil prices are already up over 4%, in a reaction to the Middle East conflict, which could threaten Oil price supply.
However, further upside in Gold price appears elusive, as the US Dollar also gains upside traction on increased safe-haven demand.
Meanwhile, a holiday in Japan is also helping exaggerate the moves in Gold price, as investors now look forward to the Middle East developments, Oil price movements and the upcoming US inflation data for fresh trading impetus.
At the time of writing, Gold price is adding 0.94% on the day to trade at $1,850, hitting a fresh five-day high at $1,856 in the opening trades.
Gold price technical levels to watch
- AUD/USD opens the week on the wrong footing, eyes 0.6300 once again.
- US Dollar jumps on safe-haven demand as Middle East military conflict rattles market.
- All eyes now remain on geopolitical tensions and US CPI data this week.
AUD/USD is falling hard toward 0.6300 in early Asian trading on Monday, having faced rejection at 0.6400 in the aftermath of the US Nonfarm Payrolls data on Friday.
The pair opened Monday’s trading, with a 57-pip bearish gap, licking its wounds in a reversal from multi-day highs.
The renewed weakness in the AUD/USD pair could be attributed to a fresh wave of risk aversion at the start of the week in Asia, as the weekend’s military conflict in the Middle East between the Hamas movement in Palestine and Israel rattles risk sentiment.
Investors scurry to the safe-haven US Dollar, fearing escalating geopolitical risks in the Middle East, which has sent Oil price through the roof. Markets remain worried over the potential impact of the renewed Oil price surge on global inflation and growth outlook, especially at a time when central banks are still reeling from the pain induced by Russia’s invasion of Ukraine, back in early 2022.
Fresh developments around the Middle East conflict will be closely followed for further impact on the safe-haven US Dollar and, in turn, on riskier assets such as equities, Australian Dollar, etc. Investors also remain cautious heading into the all-important US Consumer Price Index (CPI) week.
At the time of writing, the US S&P 500 futures, a risk barometer, are falling 0.80% on the day while the US Dollar Index is up 0.25% on the day, leaving AUD/USD down nearly 0.30% to trade near 0.6360.
AUD/USD: Technical levels to consider
The US S&P 500 futures, a risk barometer, are under intense selling pressure in early dealings on Monday, as Asian traders react to the news of a renewed military conflict in the Middle East between Palestine and Israel, which could risk spreading to other parts of the region.
On Saturday, the Palestinian militant group, Hamas, invaded ISrael by luanching an unprecedented attack from the Gaza Strip into nearby Israeli towns, killing residents and taking hostages.
developing story ....
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