Muscat: Oil prices rose sharply in Asian trade on Monday after OPEC+ said it would delay a planned output hike in December by at least a month, citing recent pressure on prices from weak demand.
Oil had risen in recent sessions after reports said the cartel was considering such a move, due to pressure on oil prices from concerns over weak demand and higher production outside the group.
OPEC+ had slashed production by nearly 6 million bpd in the past two years to support prices. Weakness in China was the biggest point of concern for oil markets, as the world’s biggest oil importer grappled with a prolonged downturn in economic growth.
Oil imports to the country also weakened sharply in recent months. Oil prices were also aided by a softer dollar, as the greenback retreated in anticipation of the U.S. presidential election this week.
Recent polls showed Donald Trump and Kamala Harris were set for a tight race. Both candidates have promised to increase domestic oil production, which is already at record highs of over 13 million bpd.
Focus this week is also on a meeting of China’s National People’s Congress this week, where policymakers are widely expected to approve more fiscal spending to boost economic growth. Recent reports said the government could approve as much as $1.4 trillion in stimulus over the coming years to support growth, Vijay Valecha, Chief Investment Officer, Century Financial.
The yellow metal was down 0.29 percent on Friday as the market correction from an all-time high of $2,790 continued due to high yields and a strong dollar.
This was because a hotter-than-expected average hourly earnings result offset the extremely weak NFP data as it was largely expected to be distorted by severe hurricanes and a major strike at Boeing.
However, gold is trading in positive territory today after its two-day losing streak last week.
Gold prices in Oman are:
24 Carat – RO34.800
22 Carat – RO32.650
18 Carat – RO25.650
The yellow metal is currently at $2,736 an ounce as elections loom around the corner, and no clear winner seems to be in sight. This uncertainty has resulted in investors rushing towards safe-haven assets like gold, as the precious metal could rally further, especially if the result is contested. The market is also focused on the Federal Reserve meeting on Thursday and is now pricing in a 99.8% probability of a 25-bps rate cut. This is expected to further be bullish for gold.
Gold is currently trading below the 9 SMA level of $2,746.8 on the daily chart. The yellow metal has strong support at the $2,732.11 level which coincides with the 70.8% Fibonacci retracement level. Below this, gold has support at the $2,725.74 level. The yellow metal faces immediate resistance at 61.8% Fibonacci level of $2,739.47 and next resistance at $2,749.1 on the 4-hour chart.
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