US Markets, Oil, Gold & Dollar in Focus
Dubai, UAE- Global financial markets remain sensitive to shifting interest-rate expectations, geopolitical developments and changing commodity dynamics, with US equities, crude oil, precious metals and the US dollar showing notable moves this week. Vijay Valecha, Chief Investment Officer, Century Financial, provides an analysis of the latest market trends, highlighting the key fundamental and technical factors shaping investor sentiment across major asset classes.
By Vijay Valecha, Chief Investment Officer, Century Financial
US Markets
The SPX Index is up 0.43% today and is currently trading at $7,664.
From a fundamental standpoint, technology stocks drove equity gains as lower oil prices buoyed broader sentiment. The brighter tone signals a remarkable shift for markets that started the week with Brent crude at a four-month high, 10-year Treasury yields at levels seen 19 years ago and chipmakers under pressure over concerns about the potential existential risks AI poses to humanity. Since then, a US interest-rate hike has helped shore up the Federal Reserve’s inflation-fighting credibility, concerns over crude supplies from the Middle East have eased, and a still-acute supply-demand imbalance in chips continues to underpin robust profit outlooks for semiconductor companies.
From a technical standpoint, the SPX Index recovered the mentioned $7,615-$7,625 level, triggering the bullish bias with targets reaching $7,700. On the hourly timeframe, attractive entry opportunities arise at $7,650.
Crude Oil
Crude oil prices have been pretty volatile this week, with WTI nearly touching $107, while Friday’s Asian session saw prices fall below $100, marking crude oil’s third straight session in the red. Meanwhile, Brent touched around $111.50 levels before falling to around $103 as of today. The spread between the two instruments has fallen sharply by about 40% this week and is currently trading at about $3.5.
Oil prices have seen some relief as supply concerns have eased after Saudi Arabia moved to restore the damaged East-West pipeline to its Red Sea coast, aiming to return about half its capacity within days. At the same time, some tanker traffic continued to pass through the contested Strait of Hormuz. The latest decline in crude prices reflects a partial unwinding of the geopolitical risk premium rather than a fundamental change in the oil market, as improved logistics for Saudi crude exports have reduced the market’s assessment of how much supply is at risk. With geopolitical developments remaining at the forefront of oil markets, prices remain sensitive to new updates in the near term rather than traditional supply-demand indicators
Technically, WTI prices have fallen to a previous support level from the highs of 3rd June near the $99 mark, coinciding with the 9-EMA on the daily chart, 50-EMA on the 4-hour chart, and the 200-EMA on the hourly chart, suggesting a key support level. If prices break below this level, selling momentum could accelerate to test the $94.50 levels from the highs of 23rd July. Brent appears to have fallen below the short-term 9-day EMA, showing a bearish structure, with key support near $102.29 before further selling.
Gold & Silver
Gold trades near $4,393, extending its rebound as lower oil prices and a subdued dollar ease inflation and rate-hike concerns. Treasury yields have cooled after spiking on Wednesday’s Fed hike, lifting pressure off bullion, which typically struggles when yields rise. Oil has fallen for a third straight day on easing Middle East supply disruptions, reinforcing the disinflationary tailwind for gold. Gold-backed ETFs have seen inflows for eight consecutive days even through recent price weakness, pointing to strong underlying investor conviction. If rising yields prove to be driven more by fiscal concerns than rate expectations, a weaker dollar could keep the broader setup supportive for bullion. Structural drivers, rising fiscal deficits, higher debt burdens, and an eventual dollar-easing cycle, continue to underpin the medium-term bullish case, with pullbacks seen as buying opportunities.
On the technical side, gold has reclaimed its short-term trendline and is testing resistance at $4,431–4,434; a close above this zone would open the way toward $4,510, then $4,573. Support lies at $4,385, then $4,340, and a bounce off this zone keeps the near-term structure constructive. A buy-on-dips approach toward support is favoured while price holds above $4,340, with a break above $4,434 confirming a shift back toward the broader uptrend.
Silver trades near $66.99, tracking gold’s rebound and headed for a weekly gain, supported by the same disinflationary and dollar-driven tailwinds.Technically, silver is testing resistance at $65.49–66.66, and a break above would open the way toward $68.00, then $70.30. Support lies at $64.58, then $63.85, with a buy-on-dips approach favoured while the recovery structure holds, targeting a retest of the $70 area on continued strength.
U.S. Dollar Index
The dollar index was flat around 100.2 today, remaining close to seven-week highs as markets assessed the Federal Reserve’s latest policy decision alongside a decline in oil prices. The index is heading for a weekly gain of more than 1% after the FOMC unanimously raised the federal funds rate by 25 basis points to 3.75%-4%, marking its first rate increase in three years. The Fed’s continued focus on containing inflation has reinforced expectations for a relatively firm US rate outlook and supported the dollar.
The pullback in oil prices has helped ease pressure on Treasury yields, with the 10-year yield falling eight basis points to 4.93% after an eight-day rise. WTI fell as much as 3.3% to below $100 before settling at $101.91, reducing some of the inflation concerns that had contributed to the recent rise in yields. However, the Fed’s preferred inflation gauge remained elevated at 3.7% in July, well above its 2% target, while the median FOMC projection pointed to one more rate hike this year. This keeps the prospect of further tightening as an important support for the dollar.
The broader rate outlook also remains supportive, with relatively high US short-term yields helping maintain the dollar’s advantage even as other major central banks move toward tighter policy. The yen weakened following the BOJ’s rate hike. For now, softer oil prices have reduced one source of upward pressure on yields, but persistent inflation and expectations of further Fed tightening should keep the dollar supported near its recent highs.
The DXY continues to trade within a relatively tight range today after breaking out of a short-term bull flag pattern, although follow-through momentum remains limited as the index consolidates recent gains. Near-term support is seen at 100.195, while immediate resistance stands at 100.360. Softer crude oil prices and weakness in Treasury yields are helping cap further upside for the dollar despite the bullish technical structure. A decisive break above 100.360 could pave the way for a move toward 100.417. On the downside, a failure to hold 100.195 could expose yesterday’s low near 100.022, which remains the next key structural support level. Meanwhile, EUR/USD is attempting a modest recovery, with immediate support located at 1.1475. However, upside potential appears constrained near 1.1503, a former support level that has now turned into resistance. This area also coincides with a descending trendline, creating a strong confluence zone that may prove difficult for buyers to overcome and could keep the broader bearish bias intact.
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