- U.S. MarketsÂ
U.S. stocks traded flat on Wednesday following the strong performance in the previous day, during which the S&P 500 reached an all-time high, rising 0.62%, while the Nasdaq was higher by 0.65%.
Tuesday’s sector leadership in materials, health care, industrials, and semiconductors underscores the coexistence of two different dynamics, the short-term technology sector rally driven by optimism over capital expenditures in the AI space (with backing from Nvidia’s comments at CES about H200 demand) and the medium-term strategic sector rotation into commodities as investors factor in the relative scarcity of certain commodities in the geopolitical climate of the Trump era. Energy stocks, foremost leaders on Monday, have weakened since then, with major energy companies voicing scepticism about spending decisions in light of geopolitical uncertainties.
On the chart, SPX is consolidating just within the $6,940–$6,950 zone after a strong impulsive move higher, suggesting a healthy pause rather than exhaustion. The series of higher lows above $6,880 keeps the short-term trend bullish, and a clean break above $6,950 would likely invite follow-through toward the $7,000 psychological level, while holding $6,880 on any dip preserves the upside bias.
- Gold & SilverÂ
Gold is trading around $4,450/oz, as it fell by 1% today, as traders take some money off the table after the recent push toward record highs. The move looks more like a pause to catch breath than any change in direction, with the broader backdrop for precious metals still supportive.
Central banks remain the anchor buyer in the gold market, according to the World Gold Council, central banks purchased 45 tonnes of gold in November alone, taking total buying for September–November to 137 tonnes, almost matching the cumulative purchases seen during the first eight months of 2025. ETF demand, which had briefly slowed after the spike in volatility in October, has since stabilised and broadened across the precious metals complex. Beyond flows, gold’s role at the intersection of reserve diversification, regime hedging, and fiscal uncertainty remains intact. Concerns from policymakers like Janet Yellen about the growing U.S. debt make gold look more appealing. At the same time, softer oil prices and easing inflation expectations are keeping real yields in check. Still, markets are entering a delicate phase where short-term moves are tricky. The Bloomberg Commodity Index is set to reduce gold’s weight to its 15% cap, potentially leading to $6 billion in selling by passive funds. While this might cause some short-term price swings, the adjustment will happen gradually, so a sharp or chaotic move is unlikely. The bull case for precious metals remains intact, but the path higher is likely to be choppier, with volatility driven by positioning resets rather than a breakdown in fundamentals.
For today, Gold has broken below the ascending channel formed since December 31, suggesting near-term selling pressure may persist. Key supports lie at the 9-day SMA near $4,413, followed by $4,350. On the upside, former channel support now acts as resistance near $4,476, with the all-time high resistance at $4,550 above that.
Silver on the other hand, has also broken its short-term ascending channel, pointing to further consolidation. Immediate support is seen at the 9-day SMA near $75.57, followed by $74.45. On the upside, resistance stands near $80.20, with the all-time high at $83.64.
- Â Crude OilÂ
WTI Crude slipped 2.45% yesterday, and extended its sharp pullback for a second straight session on Wednesday, sliding to around 56.44 (-1%), its lowest level since December 19, as selling pressure intensified across the complex. The move lower follows President Trump’s statement that Venezuela would turn over 30–50 million barrels of crude to the U.S. for sale into global markets, a development viewed as structurally bearish and that reinforces expectations of the ongoing supply glut.
While it will take time for Venezuela’s production to recover, releasing stored barrels and reducing the risk of shut-in wells could lead to more output in the future. Since the global market is already oversupplied, traders are paying less attention to geopolitical news and focusing more on the risk of surplus.
The IEA projects a surplus of nearly 4 million barrels per day this year, so downside risks remain high even after last week’s 2.8 million-barrel API draw. Given little confidence in near-term tightening, WTI is likely to remain bearish unless demand picks up strongly or there is clear action to limit supply.
From a technical standpoint, WTI is trading below all key moving averages and may find temporary support at 55.25. A sustained break below this level could lead to further downside towards 54.50. Potential resistance for WTI is seen at the 9-day SMA level of 57.611. Brent slipped 2.1% yesterday and is trading around 59.95 today. Support for Brent lies at 59.07, a previously tested level, while resistance is seen at the 20-day SMA of 60.78.
- U.S. Dollar Index (DXY)Â
The U.S. Dollar Index is holding firm around 98.50 in today’s session after showing modest gains in the previous session as investors await a fresh round of US economic data releases that could shape expectations for Federal Reserve policy.
Markets are positioning for the ISM Services PMI and JOLTs job openings data later today, followed by weekly jobless claims on Thursday and the December jobs report on Friday. The current expectations stand at a positive print for job openings compared to the previous month. If the ADP Employment data for December supports the same, it will point to a steady recovery in the labour market, supported by festive season hiring. This will underpin the DXY in the short term and reinforce the Fed’s current hawkish stance. The probability of a rate-hold stance at the next Fed meeting this month sits at 82.8% according to the CME Group’s FedWatch tool. The dollar might see temporary support from a weaker euro, following softer inflation readings in Germany and France.
The DXY price action is likely to remain range-bound with a slight bullish bias. Its price is holding above the 5-day SMA at 98.43 and close to the 20-day SMA at 98.36, suggesting near-term support. Momentum has improved modestly without entering overbought territory as short-term RSI has risen toward the mid-50s, and stochastic indicators have pushed into the mid-60s on the 9–14-day window. A sustained upside requires a decisive break above the 50-day SMA resistance at 99.08. The EUR/USD pair is trading around 1.169, holding above the 50-day EMA at 1.168, but sitting beneath the 9-day EMA at 1.172, which caps upside.
