Oil and Gold: Price review for the week ahead

This preview of weekly data examines USOIL and XAUUSD, with economic data expected later this week as the primary market drivers of the near-term outlook.

Highlights of the week: European inflation, US manufacturing & services PMI, BoC rate decision, US job report.

Tuesday

• Flash European inflation rate at 09:00 AM GMT. The rate for August is expected to increase to 3.2%, up from the previous reading of 2.9%. This could have a short-term positive effect on the Euro against its pairs because it could influence a more hawkish stance by the ECB at their next meeting.
• US manufacturing PMI  at 14:00 GMT. The consensus for August is for a decrease from 55.6 to 55.3 points. Even though the expectations are for a slight decline, the manufacturing sector in the States is holding above the 50-basis point, meaning that the sector is still expanding and holding strong, supporting the dollar.

Wednesday

• Bank of Canada Interest rate decision at 13:45 GMT is expected to remain stable at 2.25%. In the event of a surprise hike in interest rates, it would support the loonie in the short term. Conversely, a rate cut might create some turmoil for the currency.

Thursday

• US Services PMI at 14:00 GMT for August. The consensus is for the figure to remain stable at 54.1 points. This might be rather bullish news for the Dollar since it would mean that the services sector in the States is still expanding for 25 consecutive months so far.
• Friday
• Canadian unemployment rate at 12:30 PM GMT. The market is expecting the figure to remain stable at 6.4% for August. However, any significant deviation from the expected figure will most likely create volatility on all loonie pairs.
• US Job report is at 12:30 PM GMT, where the non-farm payrolls and unemployment rate are going to be published. The expectation for the NFP is for an increase to reach 45,000 against the previous recording of -23,000. If these expectations are correct, the dollar could move up in various pairs in the aftermath of the release. On the other hand, the unemployment rate is expected to increase from 4.1% to 4.2%.

USOIL, daily

Oil prices rose as Middle East tensions escalated, with the US and Iran exchanging strikes and reports that a tanker hit mines in the Strait of Hormuz. Despite the renewed conflict, traders have shown limited appetite to push prices significantly higher, with millions of barrels still moving through the key waterway. The US is also preparing additional sanctions on Iran, while Washington has moved to secure control of Venezuelan oil reserves to replenish its emergency stockpile. Meanwhile, disruptions to refining capacity across the Middle East and Russia have tightened diesel supplies, pushing fuel prices higher and driving expectations for significantly wider diesel margins in the coming years.

From a technical perspective, crude oil remains in a cautiously bullish structure, with price holding above both the 50-day and 100-day SMAs, although the recent rally has stalled below the 23.6% Fibonacci retracement around $85. The Stochastic oscillator is recovering from lower levels and moving higher, suggesting improving short-term momentum, while the Bollinger Bands remain relatively wide, indicating elevated volatility. A decisive break above $85 could strengthen the bullish outlook and open the way toward the $88–90 area, while a rejection could bring prices back toward the 38.2% Fibonacci level at $82 and the 50% level near $79. Overall, the bias remains moderately bullish as long as price holds above the key support levels.

Gold-Dollar, daily

Gold fell further after dropping more than 3% on Friday, pressured by a more hawkish Federal Reserve stance. Fed Chair Kevin Warsh reaffirmed the commitment to bringing inflation back to 2%, pushing markets to price in more than a 50% chance of a rate hike in September. Rising oil prices are adding further inflationary pressure, creating another headwind for gold. Despite the short-term weakness, gold remains up around 10% in August, supported by concerns over US debt, currency devaluation and the Treasury’s bond-buyback programme. The conflicting signs from a hawkish Fed and a more supportive Treasury could keep gold volatile heading into September.

From a technical point of view, gold remains in a broader bullish phase, with price trading above both the 50-day and 100-day SMAs, although the recent rejection from the $4,650 area has triggered a sharp correction. Price is now testing the 38.2% Fibonacci retracement near $4,500, which has become the first key resistance, while the 23.6% level around $4,300 and the 100-day SMA near $4,308 provide important support. The Stochastic oscillator has fallen sharply from overbought territory, signalling weakening momentum and leaving room for further downside before reaching oversold conditions. Overall, the medium-term structure remains bullish, but a sustained break below $4,300 would weaken the outlook and could point to a deeper correction.