- US Markets
The macro backdrop remains friendly. Investors are leaning into a mix of fiscal-led growth, cooling inflation in official data, and supportive financial conditions as the Fed eases policy and expands its balance sheet. The January Beige Book helped steady sentiment, describing economic activity as modest, employment largely unchanged, and price pressures still “moderate.” A sharp pullback in oil prices has been an added tailwind, lowering fears of a spike in rate volatility that could otherwise unsettle equities. Under the surface, participation is improving. Small caps and cyclicals are doing more of the heavy lifting, while breadth indicators point to a healthy but not euphoric market. More stocks are back above their 200-day moving averages, yet leadership remains concentrated, which explains the occasional pauses rather than outright pullbacks. The AI trade has clearly reasserted itself. Strong results and upbeat forward commentary from Taiwan Semiconductor Manufacturing Co. reignited confidence in the global AI capex cycle. Chipmakers led gains (NVDA & AMD), lifting US and Asian tech stocks and helping ease concerns that valuations in the sector had become overstretched. Importantly, tech multiples have actually come off in recent months, leaving the sector better positioned ahead of upcoming megacap earnings.
Positioning continues to support the tape. Dealer gamma remains positive in the $6,900–$7,000 zone, suppressing volatility and encouraging mean-reverting price action. With January option expiry approaching, hedging has started to come off, adding to the upward pull. Support levels are seen at yesterday’s low at $6,938, followed by this week’s low at $6,886. On the upside, resistance is seen at the all-time high level of $6,986, followed by the psychological $7,000 level. Overall, market internals look strong. Volatility remains contained, and momentum is firmly positive. While short-term consolidation is always possible near round-number levels, the broader setup argues that dips are still likely to be bought as the S&P 500 presses toward new highs.
- Gold and Silver
Gold edged lower by 0.25% on Thursday, and is trading around $4,611 in the Asian session today, as a temporary easing in geopolitical tensions reduced immediate safe-haven demand. President Trump’s more measured stance on Iran, signalling a wait-and-see approach on military action, alongside stronger-than-expected U.S. jobless claims data, helped lift the dollar and slightly weighed on bullion.
Recent U.S. economic data presents mixed signals. Declining jobless claims and robust retail sales have shifted expectations for the next Federal Reserve rate cut toward mid-year. However, subdued inflation readings support the prospect of continued monetary easing over the longer term. Markets continue to anticipate at least two Federal Reserve rate cuts in 2026, a scenario that supports non-yielding assets.
That said, the broader outlook for gold remains constructive. With geopolitical risks unresolved and central-bank demand steady, any dips are likely to be viewed as buying opportunities as the metal consolidates near elevated levels.
Technically, gold remains bullish as it trades above all key SMAs. Resistance for the metal is seen around its all-time high of $4,643, while support may be found around the 9-day SMA at $4,552. Silver remains volatile, trading down 1% today, but the structural outlook remains bullish, as industrial demand remains a strong driver. Resistance for silver lies at $95, while support is seen at yesterday’s low of $86.45.
- Crude Oil
Oil prices are trading on a soft note, with the WTI around $59.25 on Friday after recording a sharp 2% fall yesterday. This happened as worries about supply disruptions eased with the decreasing likelihood of a U.S. strike on Iran.
The imminent escalation premium on Iran that had driven prices upwards has seen a swift unwind. Also, prices continue to reflect the negative carryover from a strong U.S. crude inventory report. The recent strength in the dollar index is adding pressure on oil prices. These factors, combined, cap the near-term upside for WTI. However, Washington is boosting its military presence in the Middle East, and it should keep oil markets volatile in the short term. The scenario remains that unrest in Iran drives greater oil-price volatility rather than barrel losses.
The view for today is cautiously bearish. WTI will have to breach the critical 100-day SMA level at $60.34 as the primary challenge. It might face resistance in the $60.65-$61.05 range. A sustained hold above this would be required for any further upside. Momentum has cooled down, and volatility is slightly elevated. The 50- and 20-day SMAs at $58.64 and $58.28 lend possible support. For Brent, resistance will likely be at $63.73-$64.63, which also coincides with the 100-day SMA, with support from the 50-day SMA at $62.20.
- U.S. Dollar Index (DXY)
The dollar is trading flat around 99.31 after rising 0.3% in yesterday’s session. The index was supported after positive US economic data lowered expectations for rate cuts by the Federal Reserve anytime soon. CME FedWatch shows a 67% probability that the Fed keeps rates unchanged in April, up from 37% a month ago.
Data from the US Department of Labor showed Initial Jobless Claims unexpectedly fell to 198K in the week ended January 10, below market expectations of 215K. The data confirmed that layoffs remain limited and that the labor market is holding up. Federal Reserve officials also reinforced the case for a pause in rate cuts, citing a stabilising labour market and lingering inflation pressures.
In FX, for yen, Japanese authorities have so far relied on verbal warnings, but the lack of clarity around timing or triggers is allowing speculative pressure against the yen to persist. The ECB has kept rates on hold since June and has signalled no rush to adjust policy, reinforcing near-term support for the dollar. EURUSD one‑day expiry options show a heavy concentration of positioning around the 1.16–1.18 area, suggesting price is likely to gravitate and stay contained near this zone into expiry. Upside moves may struggle beyond the 1.20–1.22 area due to call supply.
On the technical front, the dollar is poised for a third weekly gain. Resistance lies at yesterday’s high of 99.492 whereas the support lies at the 50-day SMA of 99. For the EURUSD pair, resistance lies at 1.1652, a level that has previously acted as resistance. On the flip side, the pair could find support at the 200-Day SMA at 1.1587.
