WTI is trading around $70.77 (-0.9%) in early Asian hours, while Brent is hovering near $73.75 (-0.4%), as easing geopolitical tensions between the U.S. and Iran continue to weigh on crude prices. Markets have largely priced in the prospect of renewed diplomacy after both sides agreed to halt attacks and resume technical talks in Qatar this week.
The agreement to allow commercial vessels to move freely through the Strait of Hormuz has reduced immediate fears of a prolonged supply disruption. Although a recent attack on a supertanker highlighted that risks remain, the market is increasingly treating these incidents as temporary rather than signs of a lasting supply shock. Even though shipping activity through the Strait of Hormuz remains below pre-conflict levels, vessel movements have become significantly less restricted following the ceasefire, although a full recovery in oil flows is still expected to take time.
Attention now turns to Tuesday’s U.S.–Iran talks in Qatar and the upcoming API crude inventory report. Any signs of progress in negotiations could pressure oil prices further by improving supply expectations, while renewed tensions could quickly restore the geopolitical risk premium.
From a technical perspective, WTI is trading below key moving averages on its daily chart and retains a cautious bearish bias. Support is seen near $68.8, with resistance around $73.1 (yesterday’s high). Brent may find support near $71, while resistance is located around $76.
Precious metals are under pressure, compounding last week’s losses as a hawkish Fed and a stronger dollar create headwinds. Gold was down 3.1% last week, while silver was down 10%. In the current session, gold trades around $4,060 while silver trades around $59, both down 0.7%. The intraday bias for both metals is moderately bearish.
Fresh US-Iran strikes over the weekend raised concerns about the durability of the peace deal, threatening to drive up oil prices. This can fuel inflation fears, and treasury yields are reflecting the same in the current session. The subsequent report that both parties agreed to halt hostilities is doing little to ease market nervousness. Real yields remain higher MoM across major durations. The 5-year real yield is at 1.90%, up 30bps MoM, while the 10-year is at 2.16%, up 13 bps MoM, which has supported the US dollar and kept precious metals on the back foot. Total known ETF Holdings of Gold sit at 96.72 million troy ounces, down from around 98 million at the start of the month.
From a technical standpoint, gold has a major resistance level between $4,120 and $4,130 (contains 10-day EMA). Following this, the next resistance level appears around the 20-day EMA at $4,230. On the flipside, support could be likely around $3,960 (last week’s low), followed by $3,880.
Looking at silver, in the daily chart, silver’s resistance is likely around the $61-$62 zone. On the flip side, support could be around $55- $56 (last week’s low).
US Markets
US equity markets closed another day in the red on Friday, with the SPX index falling 0.44% and the NDX index falling 1.58%, closing out last week with declines of 2% and 4.32%, respectively. Monday’s Asian session is seeing some recovery, with the SPX index rising 0.60% and the NDX trading 1.18% higher.
Markets are breathing a sigh of relief after officials in the US and Iran suggested a pause in hostilities after a recent uptick in tensions in the Middle East. However, uncertainty remains on the higher side regarding the durability of the agreement, with oil supply levels in focus, especially as commercial vessels may now be allowed to transit the Strait of Hormuz freely. A sector rotation out of technology-driven stocks continued last week, with major stocks like Nvidia and Alphabet losing more than 8%, while Meta, Apple and Amazon dropped more than 4%. Meanwhile, the less tech-heavy Dow Jones index bucked the trend, rising 0.7% last week. Focus this week may remain on the crucial Nonfarm Payrolls report on Thursday, while earnings from Nike may catch eyes on Tuesday after market close, before US markets go into a long holiday at the end of the week for Independence Day.
From a technical standpoint, the SPX index has respected an upward-sloping trendline support connecting the lows of 17th April, 11th June, and 26th June, and has moved higher thereafter. Moreover, the price candle on the daily chart failed to close below the 50-day EMA on Friday, suggesting continued support and a bullish market structure. Additional upside might come after the price crosses above the 21-day EMA near the $7,437 level. The NDX index remains supported by the 50-day EMA and the 9-week EMA, indicating a similar bullish market structure, with additional upside potential upon crossing the 21-day EMA at $29605.
US Dollar Index
The dollar index ended last week at 101.36, rising by almost 0.6%. In today’s session, it’s down 0.16% to 101.21 as the US and Iran agreed to halt attacks and resume peace talks. The underlying trend remains bullish, driven by factors such as a hawkish Fed, artificial intelligence and a strong US economy. In the FOMC this month, Warch indicated his intention to restore price stability and set expectations of higher interest rates. According to CME Fedwatch, there is almost a 90% chance that fed will deliver at least one rate hike by the end of this year. Investors will also pay close attention to the US NFP data, which will be released this Thursday, for fresh cues on the monetary policy outlook. The importance of data under the new chairman, Warsh, has increased significantly, as he indicated that the Fed will not provide forward guidance. In this case, market participants will also be closely watching the 2-year yields, which are highly correlated with the dollar. Currently, 2-year yields have taken support at 4.06%, and a breakout above the immediate resistance at 4.23% will be closely watched for further bullishness in the index.
Moreover, AI is also supporting the dollar through both economic fundamentals and capital flows. From an inflation perspective, that buildout is putting upward pressure on the prices of associated goods. At the same time, strong demand for inputs such as semiconductors, combined with constrained supply, is pushing prices higher. Together, these forces provide a positive impulse to both growth and inflation, supporting higher relative US yields. AI is also increasing the demand for capital. IPO activity and investment-grade issuance have surged this year, reflecting the financing needs of related investments. These capital inflows increase demand for USD. As these trends continue, they should provide ongoing support for the dollar.
Technically, the index is trading at 101.21 and is above the 9 and 21-day SMA levels at 101.1 and 100.29, respectively. The daily 14-period RSI has also cooled down from extreme overbought levels in the past few days. However, it remains bullish in the near term. A break above the immediate resistance at 101.81 will indicate further bullishness for the index. On the contrary, a break below the immediate support at 100.68 will be bearish for the inde
