- U.S. MarketsÂ
US markets extended gains today, with the S&P 500 and Nasdaq 100 up 0.22% and 0.43%, respectively.
On Monday, indices moved higher, with the S&P 500 and Nasdaq 100 gaining 0.63% and 0.43%, respectively, driven by optimism about geopolitical events and fresh investment stories that lifted risk appetite. Looking beneath the geopolitical headlines, the key drivers of growth remain in tech, with CES innovations, including Nvidia’s Vera Rubin Architecture and advancements in AMD’s next-gen GPUs, poised to drive a robust 2026–2027 capex cycle. Tech mega-caps are likely to continue to outperform, especially if rate-cut hopes accelerate. The financials space is also holding up, supported by strong asset-management inflows and an active M&A environment, with further upside possible in a lower-interest-rate environment.
The ADP employment report expected tomorrow, combined with a weakening ISM Manufacturing print, may catalyse a more dovish Fed stance, setting up favourable conditions for growth equities. Further improvement in liquidity conditions adds to tech equities’ leadership story, helping to lift equity indices.
On the 4-hour chart, the S&P 500 has recovered its 9 SMA, with the strong follow-through from the lows indicating aggressive buying rather than simply a short-covering rally. As long as the price remains above $6,880, the trajectory appears biased toward a breakout above the $6,910–$6,930 resistance band, while a close below $6,880 would likely sour sentiment and open the way for a potential return to support near $6,865.
- Â Gold and SilverÂ
America’s dramatic decision to seize Venezuelan President Maduro and his wife has reinforced geopolitical risk premiums in the markets, thereby strengthening demand for safe-haven instruments such as gold and silver. As a result, gold surged 2.7% on Monday and has currently stabilised near $4,450 an ounce. Silver, on the other hand, is seeing further gains and is up 3.15% for the day at $79.08, after rising 2.9% in the previous session. The fundamental drivers that supported the precious metal rally last year remain intact, including strong central bank purchases, inflows into gold-backed ETFs, and demand stemming from rate-cut expectations. Apart from that, hedging demand is rising, with speculative demand adding to the existing momentum in precious metals. Recently, China imposed export curbs on silver, exacerbating the existing supply crunch as industrial demand continues to outpace supply. This has left silver markets in a persistent deficit, thereby supporting prices.
Expectations of further monetary easing in the U.S. and an imminent change in leadership at the Federal Reserve are likely to drive further gains in precious metals in 2026. The odds of Kevin Hassett, who is a key economic adviser for the White House, being chosen as the next Fed chairman have supported market belief that he will likely mirror President Trump’s repeated calls for lower interest rates. Former Treasury Secretary Janet Yellen has also cautioned market participants about the burgeoning U.S. federal debt. This is likely to compel the central bank to favor lower interest rates in order to minimize servicing costs.
Silver, which is trading at $78.73, has immediate support at $76.28, roughly aligning with the highs over the last few trading sessions. The next support is at $72.21, followed by the 38.2% Fibonacci retracement level at $69.30, which connects the late-October lows to the late-December highs. Sustained moves higher could result in a retest of the all-time high of $83.645. Gold, which is trading at $4,467, has immediate support at $4,375, which aligns with the late October and late November highs. It also has 21-SMA support at $4,342 on the day chart. It faces resistance near all-time highs around $4,550.
- Crude OilÂ
WTI rose 1.8% in yesterday’s session, as markets reacted to the U.S. capture of Venezuelan President Nicolás Maduro and their plan to temporarily control Venezuela’s oil sector. Crude oil surged mainly due to headlines that added a short-term geopolitical risk premium. However, the effect on near-term supply is limited. WTI is trading around 58.16 (-0.53%) in early Asian hours.
The broader implication is structural. Over time, increased U.S. influence in the world’s largest proven crude reserve base raises the prospect of higher future supply, and with global balances already skewed toward surplus, the risk profile from Venezuela remains firmly bearish.
OPEC+’s weekend decision to maintain its pause on supply hikes underscores the severity of the glut. In the near term, any price bounce looks more like positioning and geopolitical premium than a shift in fundamentals. Traders now await Tuesday’s API inventory data for fresh direction.
On the daily charts, WTI remains bearish as it tests a strong resistance level along a descending trendline connecting the highs of July 30, July 31, September 25, December 5, December 26, 2025, and January 5, 2026. WTI may find support around the 20-day SMA level of 57.66. For Brent, immediate resistance is seen at 61.68, and support lies at the 20-day SMA at 60.95.
- U.S. Dollar Index (DXY)Â
The U.S. Dollar Index is trading steadily around 98.25 in today’s session after paring yesterday’s gain as concerns about a broader geopolitical escalation eased gradually on the U.S.–Venezuela front. A weaker-than-expected ISM manufacturing reading and a dovish comment by a Fed President exerted downward pressure on the greenback.
Traders largely shrugged off the near-term impact of the US military operation in Venezuela as focus largely shifted to the U.S. ISM Manufacturing PMI reading, which fell for a third month to 47.9 in December, the lowest since October 2024. This softness in US manufacturing activity weakened the DXY. Expectations of policy easing edged up after dovish remarks from Minneapolis Federal Reserve President Neel Kashkari, a voter on the central bank’s rate-setting committee this year, told CNBC he sees a risk that the jobless rate could ‘pop’ higher. The probability of a rate hold stance at the next Fed meeting this month sits at 83.4% according to the CME Group’s FedWatch tool. The latest reading of positioning in the currency derivatives markets, published by the Commodity Futures Trading Commission on Monday for the week ended Dec. 30, 2025, and aggregated by Bloomberg, shows that speculative traders are short the dollar by about $10.5 billion — the most bearish sentiment since July.
The DXY is trading below 100-day and 50-day SMA levels at 98.36 and 99.06, reflecting bearish bias. Yesterday’s opening price of 98.48 also offers resistance. The 9-day SMA provides possible support at 98.16. The euro is trading higher against the dollar at 1.173, with key support at 1.170 and resistance at 1.175 as the pair attracts fresh buyers near the 1.171 area amid a supportive fundamental backdrop.
