Gold & Silver
Gold is down about 0.34% in the day, and is currently trading at $4,204.
From a fundamental standpoint, gold rebounded from the day’s lows after the US and Iran made “encouraging progress” in talks on a peace deal and will continue technical-level discussions this week, according to mediators Qatar and Pakistan. The parties agreed that a final deal would be reached within 60 days. Looking at the dollar picture, here, however, a clear structural bearish stance is visible. In the FOMC, nine of nineteen officials now see at least one hike before the year’s end. Seventeen of eighteen judged inflation risks tilted to the upside. The shift in the plot shift is structural. In light of this, the dollar surged abut 0.96% last week. Given this structural shift in gold, bearish momentum is expected in the coming weeks, with selling opportunities arising at every rise.
From a technical standpoint, gold failed to close above the $3,685 support level last week, retested the breakdown, and continued to fall, supporting a bearish stance in the weeks to come. From an intraday standpoint, the $3,225-$3,233 price mark acts as a Fibonacci confluence resistance level, and any bounce to these levels can act as an attractive point for shorts. In fact, gold retested this level and started falling in today’s early sessions.
U.S. Markets
SPX is pointing to a slightly softer open following last week’s close of 7,500. NDX closed last week at 30,413, with futures also marginally in the red this morning. US markets were closed on Friday in observance of the Juneteenth holiday.
On the diplomatic front, the US and Iran reached a 14-point memorandum of understanding to end hostilities, reopen the Strait of Hormuz without tolls, lift the US naval blockade, and initiate a 60-day negotiation window on Iran’s nuclear program. Just as that geopolitical relief trade was gaining momentum, the Federal Reserve stepped in to complicate the picture. Kevin Warsh chaired his first FOMC meeting, leaving rates unchanged at 3.50–3.75%, but struck a notably hawkish tone, a sharp contrast to the dovish pivot markets had anticipated from the incoming Chair.
Three themes will define how this week trades. Firstly, the Iran situation remains the wildcard. Mediators have reported encouraging progress in peace talks, but the week got off to a confusing start after Iranian media reported Tehran briefly halted negotiations following Trump’s latest threat of strikes against Hezbollah. Every headline out of the region continues to move markets.
Midweek, Micron’s earnings after the bell on Wednesday will serve as the market’s real-time read on AI data center demand, a critical sentiment check at a moment when the AI infrastructure trade remains one of the most crowded positions in equities.
Thursday’s PCE then becomes the week’s most important macro event. Any upside surprise would firmly bring October rate-hike expectations into play and meaningfully reset the rate-path narrative.
Technically, SPX is trading above its 9, 21, 50, 100, and 200-day SMAs, with the broader uptrend remaining intact. Wednesday’s brief dip below the 9 and 21-day SMAs to 7,424 was a moment of concern, but Thursday’s sharp rebound reclaimed both levels convincingly, a sign that underlying buying pressure remains firm and dips continue to attract demand. The index is now consolidating in the 7,247 to 7,510 range, having pulled back from the all-time high of 7,620 set earlier this month. This is a healthy pause rather than a reversal. A hold above 7,450 keeps the structure constructive, while a clean move back above 7,550 would signal that bulls are ready to make another run at the highs. The RSI has eased from overbought territory, creating room for the next leg higher, contingent on Thursday’s PCE print cooperating.
Crude Oil
Crude oil remains biased lower as geopolitical risk premiums continue to unwind following signs of progress in U.S.-Iran negotiations. Mediators Qatar and Pakistan announced that both sides have agreed to a roadmap aimed at reaching a final agreement within 60 days, reducing fears of prolonged supply disruptions from the Middle East.
Market pricing suggests traders are rapidly removing war-related premiums. Implied volatility has fallen back toward pre-conflict levels, Brent backwardation has weakened substantially, and hedge fund net-long positions have dropped to a 19-week low. At the same time, millions of barrels continue flowing through the Strait of Hormuz, easing concerns over near-term supply shortages.
Fundamentally, the focus is shifting back toward a potential oversupply environment. The forward curve in Middle Eastern crude grades has already moved into contango, while the IEA has previously warned of surplus supply risks next year. Demand concerns from China further reinforce the bearish outlook.
From a technical perspective, WTI remains below the descending trendline visible on the chart and continues to trade under key resistance near $78.40-$80.30. Unless tensions escalate materially or Hormuz flows are disrupted again, rallies are likely to be sold. Bearish below $78.50, targeting a retest of the $75.00 support zone.
U.S. Dollar Index (DXY)
Dollar closed 0.96% up last week and continues to rise 0.22% today as traders bet that the Federal Reserve could raise interest rates as soon as September. The Fed’s meeting last week signalled the potential for raising rates by year-end, prompting markets to bring forward tightening expectations.
The dollar’s gains come even as oil prices fall after mediators said the U.S. and Iran made progress in talks after things got off to a shaky start on Sunday. The US and Iran have established a communication line to avoid incidents and miscalculations, with the aim of ensuring safe passage for commercial vessels through the Strait of Hormuz.
Bonds are likely to extend the bear-flattening trend even if US-Iran talks play out more smoothly than they have so far, benefiting the dollar. The US PCE readings due at the end of the week may reinforce concerns that the war’s impact on cost pressures and inflationary expectations will take time to work its way through the economy. That puts a strong floor under short-end yields. Long term yields will also be biased higher due to inflation and policy uncertainties, as well as AI capex and expectations that governments will boost issuance to fund efforts to contain living costs and reboot defence strategies.
Any revival in crude prices and the upside bias for Treasury yields enhances the bull case for the dollar. A sustained move higher for the greenback is likely, against conventional currencies and versus alternative assets.
On a technical basis, the dollar index is trading above the 9 and 21 EMA for the day. RSI is at 70, indicating very strong bullish momentum. On the 1-hour chart, immediate support is at 100.7, which coincides with the 50 EMA. Below this level, the next support is at 100.3, which coincides with the 18th June breakout. Immediate resistance is at 19th June high of 101.1. A strong break above this level can send the dollar back to its 12th May 2025 high of 102.
