Navigating the Pause: The Market Impact of Extended Timelines on Equities, Energy, and Gold – comments from Century Financial

The broader setup remains unchanged. Oil continues to act as the key driver, with markets increasingly viewing $100 Brent as the dividing line between risk-on and risk-off. As long as crude remains elevated, inflation concerns persist, limiting the scope for any sustained equity rally. This has already fed into higher volatility across assets, with equities, bonds, and currencies all reacting sharply to geopolitical headlines.

Markets are also showing signs of stress. The S&P 500 is in a short-term downtrend, making lower highs and lower lows. Options positioning (negative gamma) is making moves sharper, meaning markets are swinging more than usual. High short-term trading activity (like 0DTE options) is also increasing volatility.

The macro outlook is getting weaker. The Iran conflict has reduced expectations of Fed rate cuts, as inflation risks remain high. But at the same time, expectations of a growth slowdown owing to the oil spike increase the risk of a policy mistake.

Technically, the $6,475–$6,500 zone remains a critical support area, aligning with key options positioning. A sustained break below this range could accelerate downside to this week’s low of $6,432 and eventually toward $6,000, shifting the current drawdown into a broader correction phase. On the upside, $6,580, followed by the 200 SMA at $6,655, will act as major resistance, but markets require a clear cooling in oil prices and geopolitical tensions to stabilise. Overall, while intermittent relief rallies remain possible, the underlying structure continues to weaken, with oil, yields, and volatility reinforcing a cautious and downside-biased outlook.

On Thursday, Donald Trump pushed back a deadline for striking Iran’s energy sites by 10 days, with the second pause to that threat stretching the timeline on potential attacks to April 6. Iran had allowed 10 oil tankers to sail through the strait as a goodwill gesture. Upon this announcement, Brent fell to a low of $100 and WTI fell to $90, before rallying again.

By extending the deadline, any kind of concrete resolution regarding the reopening of the Strait of Hormuz is simply getting delayed. This, in turn, extends the uncertainty weighing on markets and the broader global economy. Tehran has a string of conditions for ending the conflict, one of which is a guarantee that the US and Israel won’t resume their attacks.

On the daily chart, WTI has just recaptured the 9 SMA, and remains above the 21 SMA. RSI is around 59, indicating bullish momentum building up in prices. On the 1-hour chart,  if WTI clears the 61.8 fib level of $96.5, immediate resistance is at $99 level, followed by the 23rd March high of $103. Immediate support is at the 100 SMA at $93, followed by yesterday’s session low of $90.

On the daily chart, Brent has just recaptured the 9 SMA, and remains above the 21 SMA. RSI is around 60, indicating bullish momentum building up in prices. On the 1-hour chart, if Brent clears the 61.8 fib level of $107.5, next resistance is at $110, followed by 23rd March high of $114. Support is at 100 SMA level of $103 level, followed by yesterday’s session low of $100.

Nonetheless, gold appears to have held above its 200-day SMA situated at $4,112 – a level that was tested recently and held firm. Historical analysis reveals gold tends to fall whenever a crisis event unfolds like such as war or other forms of market distress. Despite it’s safe-haven appeal, investors tend to book gold positions to cover losses in other asset classes when there is a risk-off sentiment. However, once the dust settles and concrete signs of the situation stabilizing emerge, then gold tends to rebound sharply. In the present situation, the rolling 30-day correlation between gold and equities has turned positive at 0.31. However, history suggests that equity drawdowns such as the one we are seeing currently, typically reverse this correlation gradually, with gold’s role as a buffer kicking in. Whether that happens this time hinges on geopolitical headlines and is contingent upon a ceasefire deal.

Gold, which is trading at $4,463, has immediate support around $4,365, marked by the early-Feb low and the mid-October 2025 highs. The next support is at around $4,200 followed by the 200-SMA support at $4,112. On the flip side, gold could encounter resistance at $4,536. Its 5-period RSI is at around 36 on the day chart, signaling there is room for further upside in the near-term.

In the latest developments, the Pentagon is reportedly looking at sending up to 10,000 additional ground troops in the Middle East to give the White House more options at the negotiating table. Meanwhile, President Trump extended a deadline to attack Iranian energy infrastructure for 10 days, adding that Iran had allowed 10 oil tankers to pass through the Strait of Hormuz this week as a “present” to the US. Disruptions linked to the conflict have pushed energy prices higher, fanning inflation fears and supporting hawkish expectations on Federal Reserve policy. Markets are now pricing in a nearly 50% chance that the Fed could hike rates by December, a sharp reversal from previous expectations of two rate cuts for this year. This bodes well for DXY. With the FX markets not yet leaning into a full de-escalation trade, Brent’s price action remains a key constraint on USD downside. In that sense, the dollar’s resilience following earlier weakness underscores how tightly it is now linked to the energy complex (reinforcing petrodollar dynamics) and as a safe haven during a global risk-off sentiment. Japan’s finance minister flagged the possibility of taking bold actions to counter currency moves as the yen traded near the 160 threshold. This level is around which authorities entered the market on several occasions in 2024.