Gold Market Predictions and Oil Rebound Await February Economic Data

Amid the evolving new narrative of stronger US growth, payrolls, retail sales, and the additional Fed response required to tame the rude health of the US economy. Investors are beginning to think the hawkish Fed may not have entirely run its course yet, even after June.

A shift in economic data which could be more favourable for risk, is most likely a month away in the form of February releases on consumption, labour, and inflation. What could emerge risk supportive is the seasonal adjustment for February US non-farm payrolls, which revert from positive (+3mm) to negative (-600k700k), which one might think of as flipping the hawkish-dove meter a tad less hawkish.

In the absence of weaker data, technical levels suggest there may be further weakness in the short term for gold markets. We think longer-term investors may target the space between the lows at USD 1,820/oz and the 100 & 200- dma at USD 1,780/ oz. Coincidentally this is also roughly the congestion zone which persisted during December 2022.

Oil Bulls Await China Manufacturing Data for Rebound Signals

In oil markets, mercifully for the bulls, the China data void ends in just under a week. Oil should rebound into the data.’ on February 28, we will have the official and Caixin manufacturing PMIs, which will show further improvement.