On Monday, the oil prices strengthened limitedly due to the liquidation of investors' Short positions. As this news released, Brent oil prices were up by 0.39 percent at $83.28 a barrel.
Meanwhile, the WTI oil was up by 0.38 percent at $76.71 a barrel. Investors have started profit-taking to watch out for the Fed's meeting minutes to be released on Wednesday.
Markets are keen to seek further clues about the prospects for a Fed rate hike. It was following the release of the latest higher-than-expected Inflation data in America.
Several hawkish statements from a number of Fed officials have contributed to suppressing oil prices during the five-session streak last week. If the Fed's minutes are also hawkish, then oil prices are in danger of weakening again.
Oil Supply Grows, China Gives Positive News
Despite the United States interest rate policy, supply on WTI oil delivery contracts through May has the potential to increase. It is especially after Washington decided to release 26 million barrels of strategic oil reserves (SPR) to the market.
Meanwhile, Kazakhstan plans to deliver 100,000 tonnes of oil to Germany through the Druzhba oil pipeline in March. This more or less loosened European oil supplies.
That is amid their feud with Russia over the invasion of Ukraine. Separately, the Chinese government announced it had kept mortgage rates at historically lows.
Beijing's decision is an effort to shore up economic growth. Oil prices are likely to get a bullish boost from the news as China holds a large share of the movement of world oil prices.
Gold Future Rose by 0.3%
In fact, some experts expect China's oil demand to touch all-time highs this year. Elsewhere, the Gold prices rose in Monday's trading. The Spot gold rose by 0.2% to $1845.93 an ounce.
Besides that, the gold futures rose by 0.3% to $1855.10, and the XAU/USD chart showed a 0.15% gain to $1844.50. The slipping United States dollar provided little support for gold to continue its recovery.
The Dollar Index is traded at 103.75 in a flat condition. Analysts assess that the US Dollar is adjusting to market conditions that again expect a Fed rate hike.
The rate hike is a bump for bullish gold, so analysts still hold a bearish view of the precious metal in the near term. Further weakness herded by the Dollar's movement lead gold to the support target in the area of $1792 to $1776.
Inflation needs to be Lowered Again
That came with the resistance level at $1872, as Saxo Bank analyst Ole Hansen commented in a note. Last week, Fed officials still hinted at the need for a rate hike to suppress lower U.S. inflation.
Richmond Fed President Thomas Barkin and Dallas Fed President Lorie Logan said the central bank still needs focus on lowering inflation to its 2% target. This target has been announced before.
Their statement came after the United States Inflation report was released. In addition, the Department of Labor still displays a fairly resilient U.S. employment sector.
US Economic Data Release is Awaited
Therefore, the market will continue to pay attention to the release of economic data as a hint of the Fed's next rate hike. For the week, the market's attention is on the release of the January FOMC minutes.
Besides that, the US GDP data also becomes an important release for market participants and investors. Markets now expect that the Fed's interest rate to peak near 5.3% in July.
The analysts are still seeing an increase in the price of gold in the coming quarters. However, in the near term They think that gold will remain volatile. It is predicted until The US economic data indicates a slowdown in economic activity. This statement was said by a UBS analyst Giovanni Staunovo.
