- US Markets
The SPX Index is up 0.05% today and is currently trading at $6,990.
From a fundamental stance, on the data front Fed’s FOMC garnered attention yesterday. The Fed held its rate steady at 3.5%-3.75% after three rate cuts. Though the cut was in line with market expectations, there is a shift in the Fed’s outlook – Powell said that “Hiring’s been slow, but unemployment looks stable”, which is a shift as the Fed’s worried about the labour market tanking anymore. Additionally, Powell also hinted towards rising inflation risks. On the earnings front, Meta, Microsoft, and Tesla garnered attention. Meta’s fourth-quarter results surpass expectations as the company unveils aggressive investments in artificial intelligence and infrastructure, setting ambitious targets for 2026. Microsoft posted quarterly results above forecasts, but a slight slowdown in its cloud business disappointed investors. Finally, looking at Tesla, though its automotive division saw a decline in revenue, its battery and software divisions saw a surge. Furthermore, Musk said that Tesla is accelerating the company’s transformation from a traditional electric car maker into a “physical AI company, shifting focus towards robots”
From a technical stance, on the daily chart, SPX continues to trade close to the all-time-high level resistance at $6,975-$7,000, suggesting price acceptance. Looking at RSI, it’s currently at 60, recovering from 37 a week earlier, suggesting a bullish stance in the sessions ahead. According to the hourly chart, $6,975 and $6,960 can serve as attractive entry zones.
- Crude Oil
Crude oil gained for the third straight session after Trump served Iran an ultimatum to either cooperate in reaching a nuclear deal or risk military retaliation. This elevated the geopolitical risk premium, sending oil prices to their highest levels since September 2025. The risk of an escalation in geopolitical tensions is temporarily outweighing expectations of a supply glut. As a result, hedge funds have increased their net-bullish wagers on oil to the highest levels since August. Even the options market shows a surge in premium and open interest for bullish crude oil call options. If the U.S. strikes Iran, it could impact flows through the Middle East, which accounts for a third of global supply, particularly OPEC’s production of 3.3 mbpd. Similarly, if Iran responds, then the disruptions could spread to the Strait of Hormuz.
Brent is up 1.02% at $68.30, and if it breaks above the late-September high of $69.82, it could rally further to $70.8, roughly aligning with the lows observed in Q4 2025. It has immediate support at $66.57, followed by the next support at $65.91. WTI is up 1.41% at $64.08, with immediate support at $63.57. It could potentially rally to $64.89, with the next resistance at around $65.52.
- US Dollar Index
The dollar has traded sideways at 96.06 after the four-year low on Tuesday.
The policy messaging from Washington continues to be a problem for the dollar’s credibility. The dollar fell to 95.566 due to President Trump’s tolerance for a weaker dollar. Although Treasury Secretary Bessent reaffirmed the administration’s commitment to a strong-dollar policy, the move is seen as a temporary solution to the inconsistencies in that policy.
The fundamentals for the dollar remain unfavourable. The Federal Reserve kept its policy rates unchanged while maintaining a dovish tone. Leaving the door open for two potential rate cuts in 2026. At the same time, the Supreme Court’s Lisa Cook case on the Federal Reserve’s independence poses a tail risk to the dollar’s institutional credibility.
The cross-currency effect has also been a problem for the dollar. The Euro, Swiss Franc, and Australian Dollar are trading at multi-year highs due to policy divergence, safe-haven flows, and macro fundamentals.
EUR/USD has been trading sideways between 1.1975 and 1.1985 after a sharp move to 1.2081. The move has slowed due to a reduction in overbought conditions. The currency is trading within the 1.1980-1.2000 resistance zone. And 1.1900-1.1930 can be noted as a support zone. A close above 1.2045 or below 1.1820 is necessary for a clear direction. Meanwhile, the EUR/USD remain bullish.
- Gold and Silver
Gold increased by 4.75% and silver rose by 3.98% yesterday. Gold is trading at $5,567 and silver at $119. The sharp move in gold is driven by rising global uncertainty.
On a fundamental level, gold is rising due to growing geopolitical risks. Talks between the US and Iran failed to make progress on Iran’s nuclear program, and Trump has hinted at a possible intervention in the Middle East, which has increased uncertainty. Since 22 January, the dollar index has fallen by 2.79% as investors grow cautious about ongoing uncertainty in the US and move toward safe-haven assets like gold. While these moves are strong, they are not driven by a short squeeze. Wednesday was the second-busiest trading day of the month, and early activity on Thursday (before European markets opened) had already reached 75% of Tuesday’s total. This points to genuine demand from large investors. In addition, the threat of a partial US government shutdown on 30 January has supported gold prices. In the options market, implied volatility for the Gold ETF (GLD) stands at 39%, a level last seen in 2011.
Technically, gold pushed toward $5,604 in early trading but has since pulled back to $5,549. On the upside, $5,604 acts as key resistance, and a break above this level could open the way toward $5,700. On the downside, support is seen at $5,438 on the hourly chart. A break below this level may push gold toward the next support at $5,317.
For silver, resistance is seen near the psychological level of $120. Silver touched $120.86 in early trading before retreating. A sustained break above this level could strengthen bullish momentum and push prices toward $122. On the downside, support lies near $114, based on the hourly chart.
