U.S. Markets
The SPX and Nasdaq Index are slightly up by 0.09% and 0.2% in the day and are currently trading at $7,457 and $28,637.
From a fundamental standpoint, the US markets seem to be taking a breather after the release of Kimi K3. Kimi K3 is China’s latest AI model, and the US markets seem to be having a similar reaction to when DeepSeek’s R1 was released last year. Though markets triggered off an initial selloff, analysts at Bloomberg suggest that though models such as Kimi K3 are designed to use computing resources more efficiently, they still require enormous amounts of memory and compute capacity to operate, a dynamic that could continue to support demand for companies including SK Hynix Inc., Taiwan Semiconductor Manufacturing Co. and Nvidia Corp. Further pressure arises from renowned geopolitical tensions. Tensions between the US and Iran became more intense over the weekend, with both sides exchanging further attacks as disruptions around the Strait of Hormuz worsened.
From a technical standpoint, the SPX Index continues to trade within an ascending triangle formation, supporting a bullish outlook. From an intraday standpoint, the SPX Index has support at the $7,427 price level, supporting a bullish stance in the day. The nearest resistance is at $7,582.
Gold & Silver
Gold is trading around $4,004 (-0.4%) in Asian trading today after falling by almost 2.5% last week, as investors weigh escalating Middle East tensions against growing expectations of higher US interest rates. A stable dollar has provided some support to bullion, but the broader backdrop remains challenging as rising oil prices fuel fresh inflation concerns.
Tensions between the US and Iran became more intense over the weekend, with both sides exchanging further attacks as disruptions around the Strait of Hormuz worsened. Brent crude climbed above $90 per barrel, increasing concerns that higher energy costs could keep inflation elevated. As per CME Fedwatch tool, markets are now pricing in an 80% probability of a Fed rate hike by December, up from 73% last week. This is creating a significant headwind for non-yielding assets like gold. While geopolitical uncertainty continues to support some safe-haven demand, the inflationary impact of the conflict and higher-for-longer rate expectations are currently limiting gold’s upside.
From a technical perspective, the near-term bias remains bearish. On the 4-hour chart, gold is trading within a descending channel and below key moving averages. Immediate resistance is seen around $4,040–$4,045 at the upper boundary of the channel, while support lies near $3,970, a level that has been tested multiple times recently. A sustained break above the channel could support a recovery, while a move below $3,970 could expose further downside towards $3,920.
Silver fell by over 6.5% in the previous week and is up 1% today, trading at $56.45. The daily RSI is currently showing some signs of recovery, moving up towards 40. Silver requires a fresh catalyst to reignite momentum. Support could be seen near $54.50-$54.90. On the upside, resistance lies at $57.80.
Crude Oil
WTI Crude Oil has started the week with strong momentum, rising over 2.3% to trade around $85 at the time of writing, after delivering an impressive 15% gain last week, its one of the strongest weekly performances in recent times. CFTC data showed crude oil futures positioning increased by 21% last week, indicating that institutional traders are becoming less bearish and gradually increasing their bullish exposure to crude oil, which is supporting the recent upward momentum in prices. The rally reflects a market increasingly pricing in geopolitical risk, with supply concerns continuing to outweigh demand-side uncertainties.
The primary catalyst remains the escalating conflict between the U.S. and Iran. Following the collapse of the ceasefire, Iran declared the Strait of Hormuz closed while the U.S. reimposed a naval blockade on Iranian ports, significantly increasing the risk of supply disruptions. Shipping traffic through the Strait of Hormuz, which carries nearly 20% of global oil trade has slowed to a near standstill, reinforcing concerns over the uninterrupted flow of crude supplies. Adding to the bullish sentiment, reports that the U.S. is deploying additional refuelling aircraft to Israel signal that markets are preparing for the possibility of a broader regional conflict. Meanwhile, Iranian retaliatory strikes on key infrastructure in Kuwait including an oil facility, have further heightened concerns over the security of energy assets across the Gulf.
Beyond geopolitics, market fundamentals remain supportive. The 3-2-1 crack spread, a key measure of refinery profitability has surged to a record high above $70 per barrel, highlighting exceptionally tight gasoline and diesel markets. U.S. gasoline prices are expected to move back above $4 per gallon, while diesel prices have already climbed above $5 per gallon reflecting tightening fuel supplies and increasing inflationary pressures. With global crude inventories already at relatively low levels, the market has limited capacity to absorb any meaningful supply shock.
Technically, on the 4-hour chart, WTI Crude Oil has immediate support at $81.70, followed by the next support at $78 (horizontal line support). On the upside, immediate resistance is seen at $87.59, with the next resistance at $91.78. Brent has immediate support at $82.84 (last session low) and resistance at the $90 level (horizontal line resistance)
U.S. Dollar Index (DXY)
The U.S. Dollar Index (DXY) is trading on a flat note, down 0.06% at 100.69, as investors continue to assess geopolitical developments in the Middle East while digesting a softer U.S. inflation outlook.
Recent U.S. consumer and producer price data has reinforced expectations that the Federal Reserve will keep interest rates unchanged at its July meeting. Any further tightening would likely require a meaningful reacceleration in inflation or a much stronger labour market than currently anticipated.
While renewed tensions between the U.S. and Iran continue to provide some safe-haven support for the dollar, softer inflation data has capped further gains by encouraging markets to scale back expectations for additional Fed tightening.
Positioning data also points to a moderation in bullish dollar sentiment. The latest CFTC Commitment of Traders report showed the first reduction in speculative net-long U.S. dollar positions in two months, indicating that investors are becoming less aggressive after bullish positioning recently reached decade-high levels.
The DXY continues to trade below the 20-day EMA at 100.79, which remains the first resistance level. A sustained move above this barrier could open the door toward the psychological 101.00 mark. On the downside, immediate support lies at 100.55, a level that has acted as an important pivot in recent weeks, followed by 100.43 if selling pressure intensifies. EUR/USD is testing a significant resistance zone around 1.1442, where a key horizontal level converges with the 20-day EMA, creating an important barrier for bulls. If EUR/USD fails to clear 1.1442, initial support is seen at the 9-day EMA at 1.1433, with a further decline potentially bringing the focus to the day’s low near 1.1434. On the upside, a sustained break above 1.1442 would strengthen the near-term bullish outlook and expose 1.1474 as the next key resistance level.
