Gold is holding firm near $4,125 in Asian trading today after gaining around 3% over the previous two sessions, as dip-buying and short covering helped the metal recover from recent lows. A softer US dollar is also providing some support, although rising Treasury yields are limiting further upside.Middle East tensions remain elevated, with continued US-Iran strikes and fresh attacks on oil tankers in the Red Sea pushing crude prices to multi-week highs. Higher energy prices are adding to inflation concerns and strengthening expectations that the Federal Reserve may need to raise rates. Markets are now pricing a high probability of at least one Fed rate hike by year-end, while expectations for a September hike have also increased to 77%. Higher rates and yields remain key pressure points for gold, a non-yielding asset.
Despite these pressures, gold has managed to hold above the key $4,000 level, suggesting buyers are emerging on dips. Investors’ attention is now focused on next week’s FOMC meeting for clearer guidance on the rate outlook.
Technically, gold retains a cautiously bullish intraday bias. Resistance is seen around $4,160-$4,165, around the 200-period EMA on the 4-hour chart. A sustained breakout could strengthen upside momentum, while immediate support lies at the 20-day EMA at $4,100, followed by $4,080.
Silver rose by 1.5% yesterday and continues to show improving strength, trading around $59.80. The metal may find resistance around $61.50, while support is seen at $58.80 (yesterday’s low).
The U.S. Dollar Index (DXY) edged 0.13% lower to around 101 in early trade today, extending modest losses from the previous session. Markets continue to expect the Fed to leave interest rates unchanged at next week’s meeting, but the outlook beyond July remains less certain.Higher oil prices pushed two-year U.S. Treasury yields to a 17-month high in yesterday’s session, reflecting concerns that persistent energy inflation could delay the timing of future rate cuts or even revive discussions around further policy tightening.
Geopolitical tensions remained elevated after President Donald Trump warned the U.S. would strike Iranian infrastructure if vessels in the Strait of Hormuz came under attack. At the same time, Tehran vowed retaliation against regional energy and infrastructure assets. Fresh attacks on tankers in the Red Sea, which is the first since late February, have also heightened fears of broader disruptions to global trade and energy supplies.
In Europe, the ECB is widely expected to leave interest rates unchanged at today’s meeting while maintaining a hawkish bias. Policymakers are likely to keep the door open for another rate hike in September as higher energy prices threaten to push inflation higher again. Meanwhile, the Japanese yen remained in focus after reports that BoJ officials are open to raising interest rates faster than markets currently expect if inflation risks continue to build. While expectations of a more hawkish BOJ offered some support to the yen, the currency remains under pressure from elevated U.S. yields and the wide interest rate differential between the two economies.
On the technical front, the dollar index failed to break out of its ascending channel, suggesting that bullish momentum has weakened for the near term. The index now needs to clear the immediate resistance at 101.06 to regain upside traction. On the downside, the lower boundary of the ascending channel around 100.94 provides initial support. A successful move above 101.06 could see the index retest yesterday’s high near 101.20. On the flip side, the failure to hold channel support could expose the index towards the next support at 100.88. On the EUR/USD front, the pair has broken above the descending trendline highlighted yesterday, signalling an improvement in the short-term technical outlook. The pair is now eyeing 1.1447 as the next key resistance level, with a break above it likely to encourage further gains. On the downside, immediate support is seen at the 9-day EMA around 1.1421, followed by the former descending trendline near 1.1403, which is expected to act as support if the breakout remains intact.
U.S. Markets
The SPX Index is down about 0.3% today and is currently trading at $7,481.
From a fundamental stance, the market is expected to react to Alphabet’s earnings from yesterday. Alphabet posted blockbuster earnings yesterday. Revenue rose 24% YoY, clocking in at $119.80 billion (Est. $117.02 billion). Segment-wise, Google Cloud garnered the most attention as revenues in this segment rose 82% YoY to $24.77 billion (Est. $22.46 billion). Operating margins were clocked at 35.6% (Est. 30.8%), up from 20.7% YoY. This strengthened the narrative that AI is generating return on investment. Most importantly, the company raised the FY 2027CAPEX guidance from $180-$190 billion to $195-$205 billion. It also commented that the demand still surpasses the investment and that there is a looming compute shortage. This comment from the company is expected to bring back momentum to semiconductors again. The KOSPI Index is already up 4.4% in the day; similar momentum can be expected in semis, especially in the memory segment.
From a technical stance, the index is trading in an ascending triangle formation on the hourly chart. Given that it has breached the 38.2% Fibonacci mark, the thesis for a bear flag is invalid. Looking ahead into the day, as the index trades close to the channel support, a bullish stance is expected. The $7,475 price level is the support level. Note that this level confluences with the channel support and the horizontal support level as well. Targets extend to $7,510. However, note that a break of this support can target $7,435.
Crude Oil
WTI Crude Oil extended its gains in the previous session, rising 2.25%, and at the time of writing is trading around $89.20, up another 2.11% in today’s session. Brent crude is also trading higher at $91.50, up 1.60%, as geopolitical tensions in the Middle East continue to support oil prices.
Market sentiment have turned more bullish after U.S. President Donald Trump warned that the U.S. would retaliate by targeting Iranian infrastructure if Iran attacks vessels transiting the Strait of Hormuz, a critical shipping route through which nearly 20% of the world’s oil supply passes. The renewed threats have heightened fears that any disruption to the waterway could significantly tighten global crude supplies.
Analysts also believe that geopolitical risks could push oil prices even higher. According to Phillip Nova, Brent crude could test the $100 per barrel level if tensions continue to escalate. While the market is currently pricing in higher shipping and logistics risks rather than actual supply losses, a prolonged disruption at both the Strait of Hormuz and the Bab el-Mandeb Strait would severely limit the movement of oil cargoes. Such a scenario could quickly evolve from a logistics issue into a broader supply shock, adding further upside pressure on oil prices and increasing global inflationary risks.
Overall, volatility is expected to remain elevated, with geopolitical developments in the Middle East continuing to be the primary driver of crude oil prices in the near term.
From a technical perspective, the intraday bias for WTI Crude remains bullish as long as prices continue to trade above the 9-day EMA at $83, which also serves as the immediate support level. A sustained hold above this level is likely to keep the near-term upward momentum intact. The next key support is placed around $78.75, which coincides with a strong horizontal support zone. On the upside, the immediate resistance is seen at $91.39, and a decisive break above this level could pave the way for the next resistance near $97.
