Gold is down about 0.54% and is currently trading at $4,087.
From a fundamental standpoint, in the US, the projected PMI clocked better than expected releases yesterday. Furthermore, according to Bloomberg, forward-looking PMIs show businesses casting off any temporary concerns stemming from the Iran war to position for strong growth, an outlook that aligns with plans for a rapid increase in AI-related capex and optimism that the technology will boost activity as economic data releases are outpacing estimates at about the strongest pace since 2023. The US economy is powering ahead right now, which is part of the reason for the Fed’s hawkish stance, and for expectations that the central bank will stick with that tone for some time to come, even if oil prices fall further. The Global Composite PMI, too, is signalling expansion, though it has yet to rebound fully after the war. This is thereby set to promote risk-on sentiment, pressuring gold prices.
From a technical standpoint, the metal broke the $4,115-$4,117 support level mentioned yesterday, reinforcing a bearish stance. From an intraday standpoint, the metal has a fib confluence resistance at the $4,104-$4,114. A retest at this level offers an attractive entry for short positions with targets reaching $4,035.
Looking at silver, the metal is currently trading at the multi-month support at $61-$62, which supports a bullish stance. Furthermore, on the daily timeframe, a bullish divergence is evident, reiterating the bullish bias.
The gold-to-silver ratio also supports the above thesis of going short on gold and long on silver. The ratio is currently at 66, and according to Bloomberg, resistance is at 66-67. The nearest support is at 61.
U.S. Markets
SPX opens Wednesday in recovery mode after yesterday’s 1.44% decline and NDX was down my 3.29% yesterday .
Futures are pointing modestly higher as markets await the day’s main event: Micron earnings after the close.
Yesterday’s session was sharp but telling. A global rout in semiconductor stocks, sparked by a near 10% plunge in South Korea’s KOSPI, which triggered circuit breakers. The damage was concentrated and familiar: SanDisk fell 13%, Micron slid 13%, Western Digital dropped 8%, Marvell shed 9%, Qualcomm fell 8%, and chip equipment makers including Applied Materials, Teradyne, and Lam Research all lost more than 8%. The underlying concern was that massive AI investments by hyperscalers may generate weaker-than-expected returns, with SK Hynix’s decision to slow production of advanced AI chips to boost commodity DRAM capacity adding to doubts about near-term compute demand.
That said, the broader picture was more resilient than the headline numbers suggest. The Dow closed near flat, with defensive names like Walmart, Johnson & Johnson, and Coca-Cola attracting rotation. AXON, GE Healthcare, and IBM were standout gainers in the SPX. Beneath the surface, breadth held up with roughly three advancers for every two decliners, suggesting this is an AI trade unwind rather than a broad market breakdown.
Today, everything hinges on Micron. The numbers themselves matter less than the guidance. Investors need to hear that AI data center demand for HBM and advanced memory remains on track. Anything short of an extremely optimistic outlook risks extending the semiconductor selloff into a second day.
Technically, SPX is attempting to stabilise after yesterday’s break below the 9 and 21-day SMAs. A recovery and close back above these levels today would be constructive. Key support sits at 7,337, coinciding with the 50 Day SMA on the daily chart. Similarly for NDX, resistance lies at the 9-day SMA of 29,800. A break above this level will be constructive for NDX, whereas support lies at the 100-day SMA of 28,670.
A strong Micron print after the close could be the catalyst to reclaim lost ground quickly.
U.S. Dollar Index (DXY)
The dollar rose 0.39% in yesterday’s session and is up 0.17% today.
The US dollar is rising relentlessly higher despite a loss of momentum in Fed hike bets and Treasury yields. That’s partly because the combination of its wartime rally and the Chairman Warsh’s surprising hawkish debut helped to fully restore the greenback’s haven role. With Warsh vowing to “fix” the long-festering inflation overshoot, the markets are now factoring in well more than one rate increase, and a further firming up of those numbers will support an undervalued dollar. Further, the acceleration in the US economy looks to be equally important, providing a clear positive driver to sustain the dollar’s climb.
Forward-looking PMIs show businesses waving off any temporary concerns stemming from the Iran war to position for strong growth, an outlook that aligns with plans for a rapid increase in AI-related capex and optimism that the technology will boost activity.
On a technical basis, the dollar index broke out from the key 101.1 level and is trading above the 9 and 21 EMA for the day. The 5-period RSI is at 87, indicating very strong bullish momentum. On the 1-hour chart, immediate support is at the breakout zone of 101.1, followed by the 100.8 level. A sustained move above the breakout level can send the dollar back to its 12th May 2025 high of 102.
Crude Oil
Crude oil remains under pressure, extending its decline after falling 1.5% yesterday and trading another 1.25% lower today. Markets continue to unwind the geopolitical risk premium that was built into prices during the recent Iran conflict, with improving prospects for a diplomatic resolution and uninterrupted flows through the Strait of Hormuz shifting attention back toward underlying supply-demand fundamentals.
The bearish backdrop remains supported by expectations of additional supply returning to the market, concerns over slowing Chinese demand, and growing expectations of a global oil surplus next year. Investor positioning also reflects deteriorating sentiment, with speculative long exposure continuing to decline as traders focus on oversupply risks rather than geopolitical headlines.
From a technical perspective, WTI attempted to rebound early in today’s session, reaching a high near $74.50. However, a descending trendline that has been in place since early June once again acted as strong resistance, triggering renewed selling pressure. Prices are now testing today’s lows below $73.50, with the next key support level seen around $72.90.
On the upside, $74.00 represents the first resistance level, followed by stronger resistance near $74.50 where the descending trendline converges with a key technical barrier. As long as prices remain below this resistance zone, the near-term bias remains skewed to the downside, with rallies likely to be viewed as selling opportunities.
