Markets Cautious After CPI; Dollar Weaker, Gold Slips, Oil Holds : Comments from Century Financial

Fundamentally, the dollar may remain muted today as US markets are closed for Presidents’ Day, while China is shut for the Lunar New Year. Focus will shift to upcoming data, including ADP private payrolls on Tuesday and the Fed meeting minutes, which could provide fresh insight into the economic outlook. On Friday, Q4 GDP data will offer further clarity on growth momentum.

Technically, on the 4-hour chart, the dollar is forming a symmetrical triangle, connecting the highs of the 11th and 13th and the lows of the 11th, 13th, and 16th. This pattern signals a potential breakout. A move above $97.02 could push the index toward $97.22, aligning with the 9-day SMA. On the downside, a break below $96.89 may open the door to $96.73. The daily RSI stands at 45, suggesting limited momentum for today.

From a fundamental standpoint, Friday’s CPI data offered limited relief. Headline CPI was helped by energy, while core inflation eased modestly due to softer shelter components. Still, underlying details were less comforting. Core goods inflation firmed, suggesting tariff effects may be filtering through, while non-housing services picked up on seasonal repricing. Markets have repriced rate expectations accordingly. Fed funds futures now imply roughly 62.1 basis points of cuts by year-end, or about two and a half quarter-point moves. A June cut is back in play, with easing potentially extending into the second half, and is thereby expected to support the yellow metal.

Additionally, regarding the recent choppy nature, it must be noted that in times of extreme equity-market stress, the precious metal sometimes falls along with shares because, as a liquid asset, it can be jettisoned to raise funds to cover losses elsewhere.

From a technical standpoint, gold is forming an ascending triangle on the 4-hour chart, defined by the trendline support connecting the lows of $4,402 on 2nd February, $4,878 on 12th February, and $4,885 on 13th February and trendline resistance connecting the highs of $5,091 on 4th February and $5,101 on 11th February. A break above the $5,085 level confirms the breakout. Current price levels also offer an attractive entry point, as they are close to the trendline support, supporting a bullish stance for the day.

One reason is market positioning. As per CFTC, a large number of traders are currently holding short positions in WTI futures, around 202,928 contracts, up from 196,804 at the start of 2026 and nearing last October’s eight-year high of 232,877, signalling an increasingly crowded bearish trade. When the market becomes this heavily positioned on one side, it often creates room for a rebound. Even a small shift in sentiment can trigger short covering, which usually supports prices. Geopolitics remains the biggest factor to watch. The ongoing US-Iran tensions continues to keep some risk premium in oil prices. The Strait of Hormuz is especially critical since a significant portion of global oil supply passes through it. Any disruption or escalation there could push crude prices higher fairly quickly. In that scenario, a move toward the $70–$75 range in WTI seems possible. The derivatives market is also hinting at some upside risk. Options data shows traders are still hedging against potential price spikes, which usually reflects concerns about supply disruptions. The forward price curve has also edged slightly higher, suggesting greater sensitivity to short-term supply risks. At the same time, the fundamental backdrop of strong supply levels, OPEC+ spare capacity, and moderate demand growth keep rallies capped. Much of this, however, already seems priced in. For now, oil may stay range-bound, but overall the risk balance appears to lean slightly to the upside, especially if geopolitical tensions increase or short covering picks up.