- Crude Oil
Although WTI prices rose 2.02% on Friday, oil prices fell by 1.44% for the previous week, seeing prices drop to the $55.22 mark before recovering in a highly volatile week. This marks the continuation of bearish pressures on the commodity, as investors remained worried about weakening global economic growth due to the escalating trade war between the world’s largest economies, the US and China. Moreover, rising supply-side concerns with eight OPEC+ members deciding to raise production and return 411,000 bpd to the market in May add to the headwinds for oil prices. However, the fall in the US dollar to its lowest levels since April 2022, on the back of dovish bets of about three to four rate cuts by the Fed, could cushion the downside for dollar-denominated commodities.
On the technical front, both WTI and Brent trade below the 9-EMA level on the daily chart. WTI traded 0.21% lower on Monday, with potential support around the $60.264 level, while potential resistance could be found around the $62.904 level. Brent traded 0.09% lower on Monday, with potential support near the $62.661 level, while potential resistance could be found near the 65.664 level.
- Gold
Gold skyrocketed to yet another record high above $3,245 an ounce as it gained over 6% last week. This brings its year-to-date gains at an impressive 20%, supported by a flight to safety amidst Trump’s ever-evolving tariff policies. Although Trump initiated a 90-day tariff pause and announced a temporary tariff reprieve on consumer electronics – he also indicated that separate duties were being planned on these products. This has increased demand for safe haven instruments like gold due to heightened uncertainty. Gold benchmark auctions have experienced a significant surge in buying interest, with bids exceeding 400,000 ounces submitted during the opening round of last Thursday afternoon’s auction—the highest volume recorded since September 2019. Even ETFs have added about 5.8 million ounces of gold since the start of the year. Additionally, the U.S. Dollar has declined nearly 6% so far this year – thereby supporting gold’s surge.
Gold is down 0.2% at $3,231 with support at $3,152 – where the 21-SMA coincides with the super-trend on the 4-hour chart. It could encounter resistance at $3,245. Gold prices in the UAE today are as follows:
24 Carat – AED 389.00
22 Carat – AED 360.25
21 Carat – AED 345.25
18 Carat – AED 296.00
- US Markets
The S&P 500 closed in the green last week after solid bank earnings, optimism about Fed intervention, and a 90 day pause on tariffs. Further, on Friday, Trump exempted smartphones and computers as well as other devices and components like semiconductors from his new “reciprocal” tariffs, according to new U.S. Customs and Border Protection guidance. However, the president suggested on Sunday that the exemptions aren’t permanent. Trump also said in a social media post that these products are still subject to the existing 20% Fentanyl Tariffs, and they are just moving to a different Tariff bucket. Overall, tariff uncertainty still remains, putting some pressure on U.S. equities.
Today, big bank Goldman Sachs is expected to report earnings before the market opens, setting the tone for the rest of the day.
The S&P 500 closed above 9 SMA on Friday on the daily chart. Support is seen at $5,310, which coincides with the 20 SMA on the 4-hour chart and resistance is at $5,499, which coincides with the 70.8% fib retracement level.
- U.S. Dollar Index
The dollar weakened for a fifth consecutive day, dropping below the 100 level. The Index fell by 0.57% to 99.22. This year, the greenback has declined by almost 6% due to escalating trade tensions with China, policy uncertainties, and concerns about slowing economic growth. Market experts anticipate continued dollar weakness in the coming months, emphasising the need for a swift resolution to the trade war to prevent lasting harm to the U.S. economy. Meanwhile, hedging demand against potential dollar declines has surged to a five-year high, reflecting mounting concerns over the impact of tariff policies. Additionally, risk reversals on the dollar against major peers have reached their lowest level since the onset of the global pandemic in March 2020, highlighting heightened uncertainty in currency markets.
On the chart, DXY is currently trading below the 9-day SMA and could see resistance near 100.045 and support at 98.489 level.
