Key Events This Week
- Gold continues its bullish rally above 3,650, stalling broader market appetite.
- Crude oil holds above 61 despite OPEC’s modest production hike of 137,000 barrels per day starting in October.
- US CPI release (Thursday).
- US Preliminary Consumer Sentiment (Friday)
Gold’s bullish breakout from a 5-month triangle pattern continues to fuel gains, reinforced by growing political instability across the EU, UK, Japan, and the US. This safe-haven demand is amplified by a weaker dollar backdrop, with the US Dollar Index holding in a rangebound, bearish posture. Meanwhile, US equity indices remain cautious below record highs as investors await clearer signals on economic data and monetary policy. The release of Thursday’s CPI report could act as a catalyst, injecting another wave of volatility into the markets.
OPEC+ Policy: Gradual Unwinding of Output Cuts
At its September 2025 meeting, OPEC+ expressed optimism about cautiously regaining its market share and confirmed it will unwind only 137,000 barrels per day of voluntary cuts starting in October.
- This is part of the second tranche of a broader 1.6 million bpd unwinding, following the earlier 2.2 million bpd cuts that were fully reversed by September 2025.
- The decision reflects OPEC+’s strategy to regain market share after years of production restraint.
Oil Revenues vs. Market Share
Despite the measured pace of output increases, the current oil price zone (around $62–65 WTI) remains unfavorable for OPEC+ member revenues. This trade-off—between higher production and weaker prices—raises the likelihood of longer-term bullish positioning once the group completes the full unwinding cycle.
Gold vs. Oil Dynamics
As long as gold continues to rise, questions persist about global economic and monetary confidence. This in turn could dampen the demand outlook for crude oil unless sanctions or supply disruptions escalate.
On the other hand, renewed US-Russia deals, or sanction relief could weigh further on crude prices, leaving scope for another downward leg in oil while gold may still have room for one more upward push before any potential broad market recovery.
Technical Analysis: Quantifying Uncertainty
Crude Oil Outlook: Daily Time Frame – Log Scale
Source: Tradingview
WTI has remained in a downward contraction pattern since June 2025, forming a sequence of lower highs and lower lows. This price action suggests the potential for a fifth leg lower toward the base of the formation before a possible rebound.
Support:
61.30 – still holding as the key support.
A clean break below could extend losses to 59.80, setting up a potential bullish rebound.
A deeper decline risks moving back toward 55.00.
Resistance:
A rebound above 65.80 and a confirmed breakout from the triangle pattern could open the way toward 67.00, then 68.50, and 70.00 respectively.
Gold Outlook: daily time frame – log scale
Source: Tradingview
Gold’s bullish breakout targets the full 5-month triangle potential at 3,780, though resistance levels and pullback risks remain in focus.
- Support: Failure to close above 3,660 could trigger pullbacks toward 3,580 and 3,520 for a potential continuation setup. A deeper decline below 3,520 could extend losses toward the consolidation border at 3,480 and 3,450 respectively.
- Resistance: A firm close above 3,660 may extend gains toward 3,710, then 3,780 (major resistance), and eventually the 4,000 mark.
Written by Razan Hilal, CMT
Follow on X: @Rh_waves
