Gold is down by abut 1.81% in the day and is currently trading at $4,116.
From a fundamental standpoint, Deutsche Bank AG reduced its gold price forecasts by as much as 22%, as investors grew more wary of the outlook for US monetary policy and investment demand for the precious metal dried up. Furthermore, South Korea’s Kospi index tumbled into the close on Tuesday, ending ~10% lower, marking its worst day since March 4. The benchmark’s chip giants SK Hynix and Samsung Electronics led the broad sell-off, declining by at least 11%. The surge in single-stock futures volume, along with the steep losses into the cash close, suggests that mechanical rebalancing flows from leveraged ETFs exacerbated today’s slump, particularly as ETFs increasingly use options to gain exposure. In simple terms, just to maintain the mathematical leverage, leveraged funds increased their selling right at the close. This created a vicious cycle: selling bred more selling. Gold does not yield interest. If a market sell-off coincides with rising central bank interest rates, investors tend to pivot toward yield-bearing assets, triggering a sell-off in precious metals.
From a technical stance, gold reversed after missing our resistance level by about $5. Looking ahead, gold is trading at the previous swing low at $4,115-$4,117. A break below this level supports a bearish targeting $4,050. On the other hand, the $4,020 recovery supports the bulls, with targets reaching $4,175.
Crude Oil
Crude oil remains under pressure as markets continue to unwind the geopolitical risk premium that was built into prices during the Iran conflict. Progress in U.S.-Iran negotiations, improving tanker traffic through the Strait of Hormuz, and expectations of additional Iranian barrels returning to global markets have shifted investor focus back toward the prospect of oversupply. At the same time, concerns over soft Chinese demand and the IEA’s warnings of a potential surplus next year continue to reinforce the bearish fundamental backdrop.
Positioning data also reflects this shift in sentiment. Managed-money net long positions in Brent have fallen to their lowest levels in months, while downside hedging activity has increased as traders position for lower prices. The market is increasingly trading on supply growth and demand concerns rather than geopolitical headlines, allowing crude to retrace much of its conflict-driven gains.
From a technical perspective, today’s low near $72.50 represents a critical support level. A sustained break below this zone would strengthen the bearish trend and open the door for a deeper move lower as sellers regain control. However, if support holds, crude could attract dip buyers after the recent sharp decline.
Any recovery is likely to face significant resistance near $74.30, where a descending trendline intersects with a key horizontal resistance zone. This area has repeatedly capped rallies and is expected to act as the first major upside hurdle. While a short-term rebound cannot be ruled out, the broader outlook remains cautious as long as prices remain below trendline resistance. Unless geopolitical tensions re-escalate materially or supply disruptions re-emerge, rallies are likely to be viewed as selling opportunities within a still-bearish market structure.
A decline in the technology sector pulled the S&P 500 down 0.37% yesterday, while the tech-heavy Nasdaq Composite fell 1.32%. S&P 500 futures extended those losses early Tuesday as a sell-off in the megacap tech names continued to weigh on the broad index.
Fundamentally, the market has paused its rally and now awaits Micron’s earnings, due after Wednesday’s bell. With the rally in need of a fresh catalyst, Micron’s results will serve as a key gauge of whether AI demand still has room to run. Peace-talk developments remain an additional overhang.
Importantly, while the broad indices suggest the rally has stalled, yesterday’s leaderboard tells a different story: SMCI rose 15%, Coherent gained 9.22%, and Corning, with Vertiv, Micron, Intel, and Lumentum also advancing. This signals that investors remain bullish on the AI theme and that the market is undergoing a healthy correction rather than a genuine sell-off. A strong Micron print could be the push the market needs to resume its climb.
That said, Asian markets look shaky today: the Kospi shed 9%, and the Topix fell 2.56%. This weak sentiment could carry a bearish read-through into US trading.
Technically, the SPX continues to trade above its 9-, 21-, 50-, 100-, and 200-day SMAs, keeping the broader uptrend intact. The index is consolidating in the 7,247–7,510 range after pulling back from the all-time high of 7,620 set earlier this month , a healthy pause rather than a reversal. For SPX support sits at the 21-day SMA of 7,438, with resistance at 7,527, yesterday’s high. For the NDX, support sits at the 21-day SMA of 29,869, with resistance at 30,681, yesterday’s high.
U.S. Dollar Index (DXY)
The dollar rose 0.24% in yesterday’s session and is in the green today as markets shifted into a risk-off mood.
The market downturn appears to be driven by concerns about the AI trade, but despite the US’s exposure to tech, the dollar is still benefiting. The US economy is more resilient than many of its currency counterparts, making the dollar a natural beneficiary when risk appetite deteriorates.
The currency’s safe haven appeal has been validated since the start of the Iran conflict, with the dollar proving to be one of the few assets to provide consistent insulation. At the same time, elevated commodity prices and last week’s hawkish Fed have turned both fundamentals and momentum firmly in its favour.
The well-anticipated PCE data may show the Federal Reserve’s favourite inflation gauge accelerated on both a monthly and year-over-year basis in May. If so, that stands to add to the emerging narrative that policymakers need to tighten, potentially lifting both the dollar and Treasury yields.
On a technical basis, the dollar index is trading above the 9 and 21 EMA for the day. The 5-period RSI is at 78, indicating very strong bullish momentum. On the 1-hour chart, immediate support is at 100.8, which coincides with the 50 EMA. Below this level, the next support is at 100.6, which coincides with the 100 EMA. A strong break above 101.1 level can send the dollar back to its 12th May 2025 high of 102.
