WTI crude oil ended the previous session 2.15% lower and is currently trading at $85.02, down 0.82% in today’s session. Prices are currently testing the 9-day EMA, making it a key near-term level for intraday momentum.
The recent weakness comes despite a supportive geopolitical backdrop. The U.S. has announced broader sanctions aimed at isolating Iran and restricting businesses dealing with the country. While the immediate impact on Iranian exports may be limited, Iranian crude shipments have already declined sharply due to the ongoing blockade, with China remaining the key buyer. The bigger upside risk for oil remains Iran’s potential response, as any further disruption to the Strait of Hormuz or regional oil flows could quickly tighten global supply. Iran’s threatened retaliation against the latest U.S. measures is further keeping geopolitical risks elevated.
Technically, WTI has immediate support at $81.70, last week’s low, followed by stronger horizontal support at $79.00. On the upside, $87.34 marks the current week’s high and immediate resistance, followed by major horizontal resistance at $90.00. Brent is currently trading at 89.92, down 0.44%. Immediate support is at the 50 Day EMA at $86.63, and resistance is at $92 (current week’s high). On the 4-hour chart, WTI price action and broader structure remain constructive, with prices trading within a parallel upward channel and currently testing the channel support. For intraday traders, this support zone offers a potential long opportunity, with the setup remaining valid as long as prices hold the channel support.
Gold & Silver
Gold is holding steady at around $4,643 after four consecutive days of rallies. Last week alone saw the precious metal gaining 7% after the U.S. treasury signalled it would ramp up the buybacks of long-dated bonds to at least $14 billion in additional purchases between September 9 and November 4, which in turn pressured the U.S. Dollar. Thus, it is only natural for gold to consolidate after three back-to-back weekly gains. It briefly spiked close to $4,700 an ounce today, marking its highest intraday level since mid-May. All attention is on the Jackson Hole Symposium, where Fed Chair Kevin Warsh is slated to speak on Friday and potentially offer clues about the central bank’s stance on inflation. Recent options data also suggests an uptick in the 25-delta call skew for the largest gold ETFs indicates investors positioning for further upside. Money managers have also increased holdings while the narrowing spread between the spot and futures curve alongside resilient central bank purchases shows gold is being well-supported. Meanwhile, the U.S. has threatened economic measures against Iran, also warning of economic consequences for countries that continue to do business with Tehran. At the same time, trade tensions with Canada are escalating after negotiations broke down last week, raising the prospect of a broader trade dispute between the two economies. These factors have also increased the appeal of adding gold to portfolios. On the technical front, gold faces an immediate hurdle at $4,651. A sustained break above this level could potentially fuel a move up toward $4,700 and $4,765, while support sits around $4,560.
Meanwhile, silver is also benefiting from many of the same tailwinds supporting gold. Indian imports are beginning to recover, with 90 tonnes (2.9 million ounces) entering through the India International Bullion Exchange in August after six months of inactivity. New licensing requirements had restricted supply and pushed domestic premiums higher, encouraging traders to resume imports. Further arrivals should ease tightness as jewellers restock ahead of the festival and wedding season. However, after just ~57 million ounces in H1, H2 imports would need to more than double to approach the ~212 million ounces imported in 2025. Silver briefly touched $70/oz last week, its highest since mid-June. Silver is down 0.75% at $68.44, with strong support between $64.22 and $66.51 – where the 50-, 100-, and 200-day EMAs reside.
US equity markets were weaker on Monday, with the SPX index down by 0.15%, while the NDX index closed 0.82% lower. A slight recovery is being seen during Tuesday’s Asian session, with the SPX gaining 0.15% and the NDX trading 0.42% higher.
The NDX index seemed to have faced a larger decline on Monday as pressure on technology stocks remained heightened. However, market pressure is easing this morning, signalling a cautiously optimistic tone ahead of key earnings from Nvidia this week that could test confidence in the AI trade. Leading up to Wednesday’s earnings, Nvidia has fallen from nearly $227 to $208 in about 7 trading sessions, marking its longest losing streak since 2022. US bond yields also eased after the Treasury Department announced that it could use its $1 trillion General Account to fund its plans to ramp up government bond purchases, boding well for overall risk sentiment. Aside from this, markets will also watch Fed Chair Kevin Warsh’s presentation at the Jackson Hole meetings this week for clues about the near-term trajectory of US monetary policy.
From a technical standpoint, the SPX index is stabilising and finding support on the 21-day EMA, with a bullish RSI divergence after connecting the lows of price from 6th and 20th August. If today’s buying is sustained enough for prices to break above the 9-day EMA near $7689, further buying momentum could take prices near the key $7700 level, which acted as support in early and mid-August. The NDX index looks weaker than the SPX, with prices needing to clear the $29,287 level near the 200-day EMA before a strong upside bias is established.
US Dollar Index Â
The dollar index increased by 0.15% during yesterday’s session amid safe-haven flows, as the US moved to block Iran from the global financial system. Treasury Secretary Scott Bessent revealed plans on Monday to sanction countries trading with Iran to isolate the country further. Despite this, the dollar remains near its three-month lows and faces pressure as the Treasury Department expands its long-term government debt buyback program to curb rising borrowing costs. Hedge funds are also increasing bearish dollar positions ahead of more information on the buyback plan. Looking forward, traders will focus on the upcoming US PCE price index data due tomorrow and Fed Chair Kevin Warsh’s speech at the Jackson Hole symposium later this week, as these could provide new insights into future monetary policy moves. The pressure is also evident in the options market. According to Bloomberg’s dollar index 1-month risk reversal, the premium to hedge the dollar’s downside over the next month relative to its upside has climbed to its highest since February. According to data from the Depository Trust and Clearing Corp, demand for dollar put options versus the euro was 47% larger than that of dollar call options on Aug. 21.
Technically, the index is trading at 99.05, below the 9- and 21-day SMAs at 99.25 and 99.71, respectively. On the 4-hour chart, it broke above the near-term resistance at 98.91, but the overall trend still remains under pressure. The index may continue its downward trend, with near-term support at 98.91, followed by 98.60. Conversely, only a daily close above the resistance at 99.4 will signal near-term bullishness.
