Silver futures remain trapped in a highly volatile consolidation range after surging to a recent peak of $79.25 before retreating to a low of $72.00. According to the Variable Changing Price Momentum Indicator (VC PMI), the current Weekly Mean Price stands at $76.31, serving as the critical equilibrium point that separates bullish from bearish momentum.
Silver is currently trading near the Daily VC PMI Mean of $74.73 and is attempting to reclaim momentum above the Weekly Mean at $76.31. A sustained close above this key level would signal the start of a bullish expansion phase, initially targeting Daily Sell 1 at $77.47 and then Daily Sell 2 at $79.04. A break beyond these resistance levels would open the door toward the Weekly Sell 1 target at $79.28, which is viewed as a major profit-taking zone with high statistical significance.
On the downside, key support levels are clustered around Daily Buy 1 at $73.17 and Daily Buy 2 at $70.44. These align closely with Weekly Buy 1 at $73.23 and Weekly Buy 2 at $70.27, creating a strong demand zone between $70 and $73. The recent decline toward the $72 region completed a classic mean-reversion pattern and triggered a solid buying response, reinforcing the reliability of the VC PMI statistical model.
VC PMI Key Levels:
Weekly Sell 1: $79.28
Daily Sell 2: $79.04
Daily Sell 1: $77.47
Weekly Mean: $76.31
Daily Mean: $74.73
Daily Buy 1: $73.17
Weekly Buy 1: $73.23
Daily Buy 2: $70.44
Weekly Buy 2: $70.27
From a cyclical perspective, silver remains within an important timing window extending into early June. Historical cycle analysis suggests that significant directional moves often develop after periods of volatility compression like the one currently unfolding. The alignment of price action, timing, and momentum indicates that silver is nearing a critical inflection point, where either a breakout above resistance or a breakdown below support is likely to define the next intermediate-term trend.
According to Gann Square of 9 analysis, the recent low at $72 generates projected resistance levels near $77, $79, and $81, closely matching the VC PMI Sell 1 and Sell 2 targets. The alignment between Gann price geometry and the VC PMI mean-reversion framework strengthens the likelihood that these zones will serve as key decision areas for institutional trading activity.
Meanwhile, the MACD indicator is stabilizing around the zero line, signaling that bearish momentum may be fading. A bullish momentum crossover, combined with a sustained close above the Weekly Mean, would reinforce the case for a renewed upside move toward the higher VC PMI resistance targets.
This QuickTakes update on gold highlights that prices are holding above the 200-day moving average after reports that Iran and the US agreed on a memorandum of understanding to extend their ceasefire for another 60 days, although Reuters noted that President Donald Trump has not yet approved the deal.
Gold reached a record high of $5,318 per ounce on January 29 before plunging during the Middle East conflict in March, touching $4,375 near month-end. Prices later recovered through mid-April as the ceasefire held. Currently, gold appears to be testing key technical support around the March 26 low, the 200-day moving average, and the intermediate uptrend line. In our view, this cluster of support levels should remain intact.
The decline in gold prices since late January has pushed the metal back into the upward-sloping trading channel that has been in place since late 2023 (chart). Traders may be viewing the proposed 60-day ceasefire extension as a sign that neither Iran nor the US is willing to reignite the military conflict.
Gold’s upward trend is expected to regain momentum once the conflict comes to an end. We currently forecast gold prices reaching $5,500 by year-end and climbing toward $10,000 by the end of the decade. During the war, the US Dollar strengthened in foreign-exchange markets, creating headwinds for gold. At the same time, rising interest rates added further pressure, which is typically negative for the precious metal.
Some central banks were also compelled to sell portions of their gold reserves to stabilize their currencies as surging oil prices weakened exchange rates. Meanwhile, the Federal Reserve is expected to maintain a more hawkish stance through the summer, potentially limiting any major upside move in gold in the near term. Once the war concludes, however, many of these bearish pressures are likely to fade.
Our long-term bullish outlook for gold is based on the expectation that the S&P 500 could climb to 10,000 by the end of the decade. As equities continue to rise, we believe investors are likely to diversify part of their portfolios into alternative assets, including gold. Historically, the S&P 500 and gold prices have often moved inversely over shorter cyclical periods, while tending to advance together over longer-term trends (chart). Therefore, if the S&P 500 eventually reaches the 10,000 mark, we believe gold prices could also rise toward $10,000.
WTI attracts strong buying interest during the Asian session after fresh US strikes on Iran.
In retaliation, Iran’s IRGC launched attacks on a US airbase and warned of a stronger response ahead.
However, a sharp rise in US Dollar demand could limit further gains in crude oil prices ahead of key US economic data releases.
West Texas Intermediate (WTI), the US benchmark for crude oil, edges higher during Thursday’s Asian session and recovers a large portion of the previous day’s decline, which had dragged prices to their lowest level since April 21. The commodity climbed to a fresh intraday high in the past hour and is attempting to push back above the $91.00 level amid fears of a broader escalation in the Middle East conflict.
According to Reuters, the US launched fresh overnight strikes on an Iranian military facility believed to pose a threat to American forces and commercial shipping in the Strait of Hormuz. Meanwhile, Iran’s Islamic Revolutionary Guard Corps (IRGC), cited by Tasnim news agency, said it had targeted a US airbase in retaliation for an attack near Bandar Abbas airport and warned that any further US aggression would provoke a “more decisive” response. The rising geopolitical tensions continue to support crude oil prices by keeping the market’s risk premium elevated.
At the same time, US President Donald Trump stated that he was dissatisfied with the current terms of negotiations with Iran and stressed that he would not rush into an agreement, reducing optimism for a diplomatic resolution to the three-month-long conflict. In addition, shipping activity through the Strait of Hormuz remains constrained due to Iranian movement restrictions and a US naval blockade on Iranian ports. Further underpinning oil prices, data from the American Petroleum Institute showed that US crude inventories declined for a sixth consecutive week.
Overall, the fundamental backdrop continues to favor bullish sentiment in the oil market and reinforces the near-term positive outlook for crude prices. However, a sharp rebound in the US Dollar could limit additional upside, as a stronger greenback typically weighs on demand for dollar-denominated commodities. Traders are now turning their attention to upcoming US economic releases, including the Personal Consumption Expenditures (PCE) Price Index and the preliminary first-quarter GDP report, for fresh market direction later in the North American session.
Gold extends losses for a third consecutive session as renewed escalation in the Iran conflict strengthens the USD.
Rising inflation concerns have reinforced expectations of further Fed rate hikes, providing additional support to the greenback and putting pressure on the precious metal.
Market participants are now awaiting the US preliminary Q1 GDP data and the closely watched US PCE Price Index for fresh trading direction.
Gold (XAU/USD) remains under heavy selling pressure heading into the European session, hovering near a two-month low touched earlier on Thursday. The precious metal also appears vulnerable to extending its decline below the $4,400 level and the technically important 200-day Simple Moving Average (SMA), as renewed escalation in Middle East tensions boosts demand for the safe-haven US Dollar (USD). At the same time, expectations that major central banks could maintain a more hawkish policy stance to combat rising inflation continue to weigh on the non-yielding bullion.
According to Reuters, a US official stated that American forces launched fresh strikes in Iran on Wednesday, targeting a military facility viewed as a threat to US troops and commercial shipping in the Strait of Hormuz. The official added that US forces also intercepted and destroyed several Iranian drones posing similar risks. Meanwhile, US President Donald Trump said he was dissatisfied with the terms negotiated with Iran and would not rush into a deal, reducing optimism for a diplomatic resolution to the three-month-long conflict. Ongoing disagreements between Washington and Tehran over Iran’s nuclear program and security in the Strait of Hormuz continue to support geopolitical risk sentiment, benefiting the Greenback and pressuring Gold prices.
In addition, recent developments have helped Crude Oil prices recover modestly from a more than three-week low reached on Thursday, fueling concerns over energy-driven inflation and reinforcing expectations for further rate hikes. According to the CME Group FedWatch Tool, markets are now pricing in nearly a 50% probability that the US Federal Reserve (Fed) could raise interest rates by 25 basis points before the end of the year, while the likelihood of another hike in January 2027 stands at around 60%. Hawkish remarks from several influential FOMC officials have further pushed US Treasury yields higher, offering additional support to the USD and adding downside pressure on non-yielding Gold.
Looking ahead, investors will closely monitor key US economic releases, including the preliminary Q1 GDP report and the Personal Consumption Expenditures (PCE) Price Index. The PCE report, regarded as the Fed’s preferred measure of inflation, is expected to play a crucial role in shaping expectations for the future path of US interest rates. This, in turn, could drive fresh USD demand during the North American session. At the same time, ongoing geopolitical headlines are likely to keep volatility elevated across global markets and continue influencing Gold price movements.
Gold Daily Chart
Gold sellers remain in control after price slipped below the key 200-day SMA support. From a technical standpoint, XAU/USD continues to trade with a bearish bias within a descending channel and beneath the 500-day SMA. In addition, the Relative Strength Index (RSI) remains close to 35, signaling weak buying interest, while the Moving Average Convergence Divergence (MACD) stays in negative territory, reinforcing the prevailing downside momentum.
The metal is now approaching support at the lower edge of the descending channel around $4,311.11, following the confirmed break beneath the crucial 200-day SMA. If prices fall decisively below this channel support, it could trigger a deeper correction within the broader bearish structure. On the upside, any rebound is likely to face immediate resistance near the $4,480 horizontal barrier. A move above that level could shift focus toward the descending channel ceiling and the confluence resistance formed by the 50-day SMA around $4,625–$4,630, which may act as a stronger selling area.
Several years ago, I projected that gold’s assault on the world’s fiat currencies would likely pause around April 2026. That slowdown actually began in February. While the global currency queen still has many more victories ahead against fiat money, the market’s current phase is one of consolidation — and that’s a healthy development.
The long-term chart comparing failed fiat currencies to gold tells the real story. It’s essential for gold investors to keep their attention on the broader picture and recognize that gold is not some speculative “hot stock.”
Gold is the world’s ultimate currency, and investors should focus on steadily and patiently accumulating more of it over time.
A look at the daily gold chart shows a few encouraging “green shoots,” including a potential double bottom forming in the Stochastics (14,7,7) indicator.
However, leveraged futures traders remain concerned that the ongoing turmoil around the Strait of Hormuz could persist, potentially pushing oil prices — and in turn interest rates — higher.
Since these traders heavily influence short-term market movements, their concerns continue to weigh on gold’s near-term price action.
The US government had hoped for a swift resolution to the war in Ukraine, but that outcome has yet to materialize. In response to the prolonged conflict, the Russian central bank has increasingly turned to gold sales to help finance the ongoing strain and instability.
Notice the weak, “wet noodle” behavior of the key 14,5,5 Stochastics oscillator.
That kind of sluggish momentum appears consistent with the idea of continued central bank gold selling from Russia — and possibly Turkey and others as well.
The war in Ukraine created significant disruption across global markets, and the conflict involving Iran could generate even greater turbulence.
Oil shortages are already emerging in parts of Asia and are expected to reach Europe within weeks. To cushion the impact, the US government has been drawing down and effectively “exporting” oil from the Strategic Petroleum Reserve (SPR). However, if the Strait of Hormuz crisis continues, that supply may soon be needed domestically.
In short, gold futures traders increasingly believe the Iran conflict could lead to prolonged inflationary pressure and higher interest rates — though likely not to the extreme levels seen during the 1970s.
That also means many traders continue to view higher interest rates as a negative factor for gold.
As for gold investor morale, the BPGDM sentiment index — while technical in nature — has historically done a solid job of reflecting overall sentiment within the gold market.
Periods of weak confidence typically occur when the BPGDM falls below the 50 level, which is exactly where it sits now. Interestingly, those same periods have often presented some of the best buying opportunities for long-term investors.
In short, the market may still need a bit more consolidation before gold, silver, and mining stocks begin their next major move higher against fiat currencies. However, investors accumulating positions during the current weakness are likely to be rewarded over the longer term.
The US stock market may appear overvalued, yet the broader trend remains remarkably bullish. Historically, precious metals often rally alongside strong equity markets — although there is usually a delay before gold and silver begin to catch up.
In many cases, the stock market moves first, while metals and mining shares follow later as liquidity and investor enthusiasm gradually spill over into the sector.
Gold’s current pause is unfolding alongside a similar consolidation on this impressive CDNX weekly chart.
At the same time, the market appears to be adding the “final touches” of symmetry to a powerful inverse head-and-shoulders launchpad pattern — a formation that many investors view as a strong long-term bullish setup.
The daily chart for GDX shows that key momentum indicators — including the RSI, Stochastics, and MACD — are no longer confirming the latest low in price.
That positive divergence comes at the same time as the stock market’s powerful upside breakout, suggesting the current lull in precious metals could simply be the calm before a major rally.
The bigger questions gold investors should ask themselves are straightforward: If government narratives stop focusing on debt, does the debt suddenly disappear? Of course not. If gold stocks and silver have historically lagged behind the stock market before eventually staging explosive rallies, is it reasonable to expect that pattern to repeat? Absolutely. And is gold still one of the world’s most trusted and enduring forms of money? Many investors would say yes.
In short, for gold bulls, the strategy right now may simply be to stay patient — and stay optimistic.
Silver weakens as renewed US-Iran tensions fuel inflation concerns and reinforce expectations of higher-for-longer interest rates. Iran claimed it struck a US F-35 fighter jet and multiple drones after Washington confirmed “self-defense” strikes in southern Iran. Meanwhile, investors continue to evaluate the Federal Reserve’s policy outlook after May consumer confidence fell amid rising inflation fears linked to the Middle East conflict.
Silver prices (XAG/USD) stayed under pressure for a second straight session, hovering near $76.90 per troy ounce during Wednesday’s Asian trading hours. The precious metal remained subdued amid renewed geopolitical tensions and uncertainty surrounding the strategically important Strait of Hormuz, although investors continued to watch for possible progress in US-Iran peace negotiations.
Market sentiment was shaken by fresh military confrontations in the Middle East, heightening concerns over a potential energy-driven inflation surge. These fears reinforced expectations that major central banks may maintain restrictive monetary policies for a longer period.
The US military confirmed carrying out self-defense strikes in southern Iran, while Iran’s Revolutionary Guard stated it had targeted an American F-35 fighter jet along with several drones allegedly entering Iranian airspace.
Adding to tensions, Iran’s foreign ministry condemned the recent US airstrikes in Hormozgan province, calling them a “gross violation” of the fragile seven-week ceasefire. Iranian media also reported explosions across the region early Tuesday.
Investors are also evaluating the Federal Reserve’s policy outlook, a key driver for non-yielding assets such as silver. The US Consumer Confidence Index slipped to 93.1 in May from a revised 93.8 in April, as concerns over inflation tied to the Iran conflict weighed on sentiment. Although consumers remained pessimistic about current labor market conditions, many still expected improvement later in the year.
Attention is now turning to upcoming comments from Federal Reserve officials, including Vice Chair Philip Jefferson and Governor Lisa Cook, for further insight into the inflation and interest-rate outlook. Traders are also awaiting Thursday’s US Personal Consumption Expenditures (PCE) report, which could provide additional clues on the future path of Fed policy.
WTI advances amid renewed supply concerns after US self-defense strikes in southern Iran on Monday. President Donald Trump said talks on a deal with Iran are “proceeding nicely,” though he warned that failed negotiations could lead to fresh military action. Meanwhile, three LNG tankers and a previously stranded Iraqi crude supertanker have recently transited the Strait of Hormuz en route to Asia.
West Texas Intermediate (WTI) crude oil prices rebounded during Tuesday’s Asian session, recovering from four consecutive daily losses to trade near $90.60 per barrel. The recovery was driven by renewed concerns over supply disruptions after US forces carried out self-defense strikes in southern Iran on Monday.
According to Fox News, a spokesperson for US Central Command said the strikes targeted missile launch sites and Iranian vessels allegedly attempting to deploy naval mines. While Washington reaffirmed its commitment to protecting US personnel, officials also stressed that the military would continue exercising restraint under the current ceasefire arrangement. Iranian media outlets reported explosions in and around the coastal city of Bandar Abbas near the Strait of Hormuz.
Despite Tuesday’s rebound, WTI had plunged more than 6% on Monday after Bloomberg reported that US President Donald Trump said negotiations with Iran aimed at ending the conflict and reopening the Strait of Hormuz were “proceeding nicely.” Trump nevertheless warned that a breakdown in talks could prompt renewed military action, although reports suggested that a Pakistani mediator had informed China that an agreement was close.
The US and Iran are currently negotiating a framework that would extend the ceasefire for roughly two months. Under the proposed arrangement, Washington would ease its maritime blockade while Tehran would reopen the Strait of Hormuz.
Both sides have reportedly made progress toward a memorandum of understanding intended to pause hostilities and grant negotiators a 60-day window to finalize a broader peace agreement. Supporting signs of tentative de-escalation, ship-tracking data showed that three LNG tankers recently transited the strait en route to Pakistan, China, and India. In addition, a supertanker carrying Iraqi crude oil resumed its voyage to China after being stranded for nearly three months.
Gold comes under renewed selling pressure on Tuesday as recovering US Dollar demand weighs on the precious metal. Mixed signals surrounding a potential US-Iran peace deal continue to support geopolitical uncertainty, while expectations for further Fed rate hikes provide additional support to the USD and pressure Gold prices.
Gold (XAU/USD) faces renewed selling pressure during Tuesday’s Asian session, surrendering much of Monday’s rebound near the $4,580 resistance level as renewed US Dollar strength weighs on the precious metal. Although uncertainty surrounding a potential US-Iran peace agreement continues to limit broader market optimism, safe-haven demand for the USD remains supported. At the same time, persistent geopolitical tensions have sparked a modest recovery in Crude Oil prices, reviving inflation concerns and reinforcing expectations that the US Federal Reserve may maintain a hawkish policy stance. This, in turn, provides additional support for the Greenback and pressures the non-yielding yellow metal.
Reports citing comments from Central Command revealed that US forces carried out self-defense strikes in southern Iran on Monday, targeting missile launch sites and Iranian boats allegedly attempting to deploy mines. The latest escalation adds to ongoing disputes over Iran’s nuclear program and tensions surrounding the Strait of Hormuz, reducing hopes for a resolution to the nearly three-month-long conflict. Furthermore, US President Donald Trump has repeatedly warned of further military action if Iran refuses to accept a broader peace agreement. These developments keep geopolitical risks elevated and help the safe-haven USD recover after falling to a more than one-week low on Monday, adding downside pressure on Gold prices.
Meanwhile, Iran has effectively disrupted nearly all shipping activity through the Gulf since the conflict began, affecting around 20% of global oil supplies. Combined with the US blockade of Iranian ports and the latest military developments, this has helped Crude Oil prices rebound from a two-week low. The renewed rise in energy prices has reignited fears of persistent inflation, increasing speculation that major central banks — including the Fed — may adopt a more aggressive monetary policy stance. According to the CME Group FedWatch Tool, markets are now pricing in the possibility of at least one Fed rate hike in 2026. This further strengthens the USD and continues to divert flows away from non-yielding Gold.
Investors are now turning their attention to Thursday’s release of the US Personal Consumption Expenditures (PCE) Price Index and the preliminary US GDP report, both of which could significantly influence USD demand and provide fresh direction for XAU/USD. In the meantime, traders will also monitor Tuesday’s Conference Board US Consumer Sentiment Index for short-term opportunities, while keeping a close watch on developments in the Middle East that may continue to drive volatility across global financial markets. Overall, the broader fundamental backdrop suggests that the path of least resistance for Gold prices remains tilted to the downside.
Technical Analysis (H4)
From a technical standpoint, Gold remains vulnerable while trading below the key $4,580 resistance level and the 100-period EMA on the 4-hour chart. The precious metal was rejected near the $4,580 horizontal barrier on Monday, reinforcing a mildly bearish near-term outlook. Although the Moving Average Convergence Divergence (MACD) histogram remains in positive territory, price action continues to struggle beneath short-term resistance. Meanwhile, the Relative Strength Index (RSI) stays near the neutral 47 mark, indicating limited bullish momentum that is still insufficient to challenge higher resistance levels.
The $4,580 zone now acts as the first major resistance, followed by the 100-period EMA on the 4-hour chart near $4,593.73. A sustained move above this region would be required to weaken the prevailing bearish bias and pave the way for a stronger recovery. Until then, XAU/USD remains exposed to further downside pressure, with intraday traders likely focusing on previous swing lows around the $4,490–$4,485 area and the $4,450 level as the next important support zones.
NZD/USD has been highly volatile throughout the week, and that remains the key theme. The pair appears to have support around the 0.58 level, while resistance is likely near 0.5950.
Overall, this market is likely to remain very choppy. However, with interest rates easing slightly toward the end of the week, the New Zealand dollar could gain some momentum and stage a rebound. On the other hand, if the pair falls below the 0.58 level, it may trigger an additional 100-point decline.
AUD/USD
AUD/USD has also seen a great deal of volatility, with the pair currently hovering around the 0.7150 level. This zone previously acted as resistance and should now provide support. If the pair breaks above this week’s candlestick high, it could pave the way for a move toward the 0.7275 level.
However, a break below the candlestick low could open the door for a decline toward the 0.70 level. It’s worth noting that the Australian dollar continues to outperform many other currencies against the US dollar. As a result, buying on pullbacks may still be the preferred strategy, although market conditions are likely to stay highly choppy.
Gold
The Gold market was also highly volatile this week. With U.S. interest rates remaining relatively elevated, it has become challenging for gold to maintain upward momentum. Overall, the market is likely to keep a close eye on the $4,600 level, as a breakout above that area could pave the way for a move toward $4,800.
On the downside, if price falls below the weekly candlestick low, it could trigger a decline toward the $4,300 level. Broadly speaking, gold continues to be heavily influenced by interest rate expectations — when U.S. rates rise, gold tends to weaken.
USD/CAD
The US dollar has been climbing against the Canadian dollar throughout the week, and that trend is likely to continue. A push toward the 1.39 level seems possible, although the move may remain uneven and volatile along the way.
USD/CAD is typically a range-bound market, so periods of choppy price action would not be unusual. Traders should keep an eye on US interest rates, as further increases could provide additional strength for the pair. Meanwhile, Canada’s economy continues to show signs of weakness, which currently supports a stronger US dollar in this environment.
Bitcoin
Bitcoin ended the week slightly lower, but strong support still appears to be in place beneath current levels. The broader recovery trend remains intact, and the market could eventually rebound toward the $84,000 region. Despite recent geopolitical tensions and the outbreak of war, Bitcoin has shown notable resilience, which is a positive sign for bulls.
Price action is expected to remain volatile and noisy, so patience may be necessary. Another important factor is the continued inflow of institutional money into Bitcoin ETFs, as sustained investment demand could help support prices over time.
USD/MXN
The US dollar moved erratically against the Mexican peso throughout the week, hovering near the 17.33 area. Resistance is seen around 17.50, while the 17.00 level continues to provide support.
This pair is likely to remain highly volatile, with interest rate expectations continuing to influence sentiment. Since Mexico still offers significantly higher interest rates than the United States, traders may continue favoring strategies that involve selling USD/MXN rallies, especially when bearish reversal signals appear on shorter timeframes.
EUR/USD
The euro posted modest losses during the week and tested the 50-week EMA, although overall trading conditions remain choppy. Interest rate differentials between Europe and the US continue to dominate market sentiment, while the 1.16 level appears to be acting as a key price magnet.
The pair is drifting closer to the lower boundary of its broader consolidation range, which could open the door for a move toward 1.14. Ongoing concerns surrounding Europe’s energy situation may add downside pressure. On the other hand, if momentum improves, EUR/USD could attempt another rally toward the 1.1750 region.
NASDAQ 100
The Nasdaq 100 continued attracting buyers on pullbacks, reinforcing the market’s strong bullish momentum. Investors increasingly appear focused on the possibility of the index reaching the 30,000 level, especially as enthusiasm surrounding artificial intelligence continues to drive technology stocks higher during earnings season.
For now, buying dips remains the dominant strategy. Rising interest rates could eventually create headwinds for equities, but the Nasdaq 100 has so far shown an ability to overlook many macroeconomic concerns. At the current pace, a move toward 30,000 seems increasingly realistic.
WTI remains under modest selling pressure for the third consecutive day, albeit without strong bearish momentum.
Uncertainty surrounding a possible US-Iran peace agreement continues to offer support to the black liquid.
Meanwhile, the technical backdrop suggests caution before placing aggressive bullish bets or anticipating a sustained upside move.
West Texas Intermediate (WTI), the US benchmark for Crude Oil, extends its decline for a third straight session and trades around the mid-$96.00s during Friday’s Asian session. Despite the weakness, prices remain above Thursday’s nearly two-week low near the key $95.00 psychological level.
A senior Iranian official stated that no agreement has yet been finalized with the United States, although negotiations have reportedly narrowed existing gaps. Even so, market participants remain doubtful about the prospects of a US-Iran peace deal due to persistent disputes over Tehran’s nuclear ambitions and tensions surrounding the strategic Strait of Hormuz. The ongoing geopolitical uncertainty continues to lend support to Crude Oil prices and limits the scope for aggressive bearish positioning.
From a technical standpoint, the black liquid continues to trade above a significant support zone despite fading momentum, hovering near the 38.2% Fibonacci retracement of the April rally. Additional support comes from the 200-period Simple Moving Average (SMA) around $95.09 and an ascending trend-line near $95.49, both of which continue to reinforce the broader bullish structure.
Nevertheless, bearish signals are gradually strengthening. The Relative Strength Index (RSI) remains close to 36, while the Moving Average Convergence Divergence (MACD) stays in negative territory, indicating increasing downside pressure. As a result, recovery attempts could remain limited unless buyers reclaim the nearby resistance at the 23.6% Fibonacci retracement around $100.42. A sustained move above that level would be required to revive bullish momentum and target recent highs again.
On the downside, initial support is seen near the 38.2% Fibonacci retracement at $96.32, followed by the trend-line support around $95.49 and the 200-period SMA near $95.09. A decisive break below this support cluster could accelerate losses toward the next Fibonacci levels at $93.00 and $89.69, potentially shifting the medium-term outlook firmly in favor of sellers.
Gold comes under renewed selling pressure as geopolitical tensions and hawkish Fed expectations continue to support the US Dollar.
Iran’s uranium enrichment program and control over the Strait of Hormuz remain major obstacles in negotiations.
The technical outlook also favors the bears, reinforcing the likelihood of additional downside pressure.
Gold (XAU/USD) faces renewed selling pressure after Thursday’s volatile price action, although it continues to hold above the key $4,500 psychological level during Friday’s Asian session. The US Dollar (USD) stays near a six-week high reached earlier this week, supported by growing expectations that the Federal Reserve will maintain a hawkish stance. In addition, uncertainty surrounding a possible US-Iran peace agreement boosts demand for the Greenback’s safe-haven appeal, weighing on the precious metal.
Markets have now fully ruled out any Fed rate cuts for the rest of 2026 and are increasingly pricing in at least one rate hike before year-end amid concerns over rising energy costs and persistent inflation. Minutes from the April 28–29 FOMC meeting showed policymakers leaning toward keeping interest rates elevated — or even tightening further — if inflation remains above the Fed’s 2% target. According to the CME Group FedWatch Tool, traders currently see more than a 60% probability of a 25-basis-point rate increase in December. This outlook has fueled a recent rise in US Treasury yields, strengthening the USD and reducing the appeal of non-yielding assets like Gold.
Meanwhile, a senior Iranian official stated that although no agreement has been finalized with the US, differences between both sides have narrowed. However, Iran’s uranium enrichment program and control over the strategically important Strait of Hormuz remain major obstacles in negotiations.
Marco Rubio warned that Iran’s proposal to impose tolls on vessels passing through the Strait could effectively undermine prospects for a peace deal. US President Donald Trump also reiterated that Washington opposes any toll system in the Strait of Hormuz and stated that the US military would move to secure Iran’s highly enriched uranium stockpile. These geopolitical risks continue to support the USD, reinforcing the broader bearish outlook for Gold.
WTI pauses after the previous day’s steep decline as traders weigh conflicting signals surrounding a possible US-Iran peace agreement. Trump pointed to progress in negotiations with Iran, though he also warned that military action remains possible if talks fail. Meanwhile, declining US crude inventories driven by solid demand continue to lend support to oil prices.
West Texas Intermediate (WTI), the US crude oil benchmark, stabilized after plunging nearly 5% in the previous session as traders assessed conflicting signals surrounding a possible US-Iran peace agreement. The commodity hovered near $98.30 on Thursday, little changed on the day, with markets closely monitoring developments in the Middle East.
US President Donald Trump said the US was in the “final stages” of negotiations with Iran, raising hopes for easing tensions. US Vice President JD Vance also expressed optimism, noting that Iran appeared willing to reach an agreement. The comments initially pressured crude prices lower overnight, though losses were capped after Trump warned that further military action remained possible if talks collapsed.
Iran responded by condemning Trump’s warning and cautioned that any renewed US or Israeli strikes could significantly intensify the conflict. Investors also remain doubtful that a peace deal can be achieved soon due to deep disagreements over Tehran’s nuclear program and ongoing tensions surrounding the Strait of Hormuz. Iran has reportedly introduced a new “Persian Gulf Strait Authority” aimed at overseeing traffic through the vital shipping route.
These geopolitical concerns continue to support oil prices and help prevent a deeper sell-off. Additional support came from the latest Energy Information Administration data, which showed declines in US crude and gasoline inventories last week amid resilient demand. As a result, traders may wait for stronger follow-through selling before concluding that crude prices have formed a near-term top.
Silver extends its rebound for a second straight session on Thursday as follow-through buying interest remains intact.
The intraday technical picture continues to support bullish momentum and points to the potential for further upside.
However, a decisive break above the key $76.75 confluence resistance is required to confirm the bullish outlook.
Silver (XAG/USD) is extending Wednesday’s rebound from the nearly two-week low around the $73.00 area, advancing for a second consecutive session on Thursday. During Asian trading hours, the precious metal moved back above the mid-$76.00 region, although it still trades below Tuesday’s weekly peak.
From a technical standpoint, XAG/USD is testing a key resistance zone near $76.75, where the 100-hour Simple Moving Average (SMA) aligns with the 23.6% Fibonacci retracement of the recent decline from the monthly high. A sustained break above this confluence area could provide a fresh bullish catalyst and support additional near-term upside momentum.
Short-term indicators suggest bearish pressure is fading rather than strengthening. The Relative Strength Index (RSI) is hovering near 57, while the Moving Average Convergence Divergence (MACD) remains slightly in positive territory. As a result, a decisive move above the $76.75 barrier may open the door toward the 38.2% Fibonacci retracement at $79.21, followed by the 50% retracement level near $81.14.
On the downside, strong support is located around $72.97, which marks both the recent cycle low and a major Fibonacci anchor. Buyers are likely to re-emerge more aggressively in that region if the corrective decline resumes.
A 40-year supercycle in commodities, inflation, and interest rates began in 2020 and is likely to extend through 2060.
As legendary commodities strategist Jeff Currie has argued, this cycle is fundamentally driven by a widening imbalance between demand and supply.
While the conflicts in Ukraine and Iran are acting as medium-term catalysts for higher prices, the longer-term trend is being fueled primarily by soaring global government debt and the economic rise of billions of consumers across Asia and Africa.
Some countries are feeling a greater impact than others from the US government’s latest debt-financed conflict with Iran, which has unfolded largely as many analysts feared.
As a result, certain central banks and gold-focused investors in affected regions have been selling gold holdings. Since most global assets and expenses are still denominated in fiat currencies, many households are liquidating “rainy day” gold savings instead of taking on additional debt.
From a broader perspective, advocates of hard assets argue that the global financial system would be more stable if it were centered on gold-backed savings rather than fiat-driven debt expansion.
Over time, the Strait of Hormuz is expected to reopen, potentially under a more permanent toll structure. Ironically, oil prices could climb even further after the conflict ends than they have during the war itself, raising the possibility of crude prices reaching $200 or even $300 per barrel.
Mainstream commentators have gradually shifted away from expecting aggressive rate cuts and renewed waves of quantitative easing, instead acknowledging at least part of the reality of this unfolding supercycle: interest rates may need to move higher.
What many still fail to recognize, however, is that rates could remain elevated for an extended period as policymakers struggle to offset the combined pressures of a long-term commodities boom and governments’ deep reliance on debt financing.
Notice the blue arrows on the left side of the chart: during the previous 40-year supercycle, interest rates experienced four separate periods of decline.
The current cycle is likely to follow a similar pattern: interest rates may trend higher overall, but with intermittent periods of decline along the way. That initial downward phase now appears to be approaching its conclusion.
A closer examination of the US rates chart highlights the move clearly. In late 2023, yields retreated from around 5% to roughly 3.5%, forming what technicians describe as a bullish triangle or pennant pattern.
An upside breakout now appears increasingly likely, potentially paving the way for a fresh advance toward the 6%–7% range.
What about gold? The weekly chart suggests that a sizable flag pattern may be developing, though rather than attempting to forecast the next major move, investors may be better served focusing on important accumulation zones.
From that perspective, the $4,100, $3,900, and $3,500 levels stand out as potential buy areas below the current market price where long-term gold investors could step in aggressively.
Meanwhile, the Stochastics oscillator (14,5,5) points to the possibility of further near-term weakness. The latest buy signal failed to gain traction and was triggered prematurely from above the oversold 20 threshold, indicating that downside pressure may not yet be fully exhausted.
A look at the daily chart shows several highlighted buy zones, both above and below the current market price.
For investors — particularly those involved in mining stocks — one of the most dependable strategies is to accumulate within these support zones during price pullbacks rather than chasing bullish breakouts after prices have already surged.
At present, the $4,500 area can still be viewed as a buy zone, though mainly for more aggressive traders, as the current pullback remains relatively modest.
As stagflation pressures deepen, additional gold selling from central banks in countries facing severe economic strain from the Strait of Hormuz disruption remains possible. That outlook aligns with the ongoing consolidation pattern on the charts and the indecisive behavior currently shown by momentum oscillators.
The long-term chart comparing GDX to gold shows that the market is currently pausing near the neckline of a massive inverse head-and-shoulders formation — a consolidation phase that many gold-stock investors had been warned to expect.
At this stage, patience may be the most important requirement. If the breakout eventually materializes, the rally that follows could be exceptionally powerful — and it may arrive sooner than many anticipate.
In simple terms, there is a crucial distinction between investors selling government bonds because economic growth is strong and selling them because confidence in governments’ ability to repay debt is beginning to erode.
At some point, institutional investors may stop avoiding gold because it offers no yield and instead start accumulating it out of concern that governments worldwide are losing control of their debt burdens. Such a shift could trigger an intense wave of buying in mining stocks as well.
What may lie ahead resembles a more extreme version of the inflationary 1970s environment — though for now, patience remains essential, because in this market, patience could prove golden.
Gold remains under pressure on Wednesday, extending its decline as the US Dollar stays broadly stronger. Ongoing geopolitical tensions and increasing expectations of further Federal Reserve rate hikes continue to support the greenback near a six-week high. Investors are now awaiting the release of the FOMC Minutes for additional insight into the Fed’s future policy direction.
Gold (XAU/USD) extended its losses on Wednesday, falling to its lowest level since March 30 after briefly rising above the $4,500 mark during the Asian session. The precious metal remains under pressure as the US Dollar (USD) stays strong, supported by persistent geopolitical uncertainty, inflation concerns, and expectations of a more hawkish Federal Reserve (Fed).
Investor caution remains elevated amid uncertainty surrounding a potential US-Iran peace agreement. US President Donald Trump stated on Tuesday that the US could launch another strike on Iran if negotiations fail, noting that he had delayed a planned attack following requests from Gulf leaders. At the same time, Vice President JD Vance said both Washington and Tehran had made significant progress in talks and were seeking to avoid renewed military conflict. However, ongoing disagreements over Iran’s nuclear ambitions and the Strait of Hormuz continue to cloud the prospects for a diplomatic resolution. This uncertainty has reinforced the US Dollar’s safe-haven appeal, weighing further on Gold prices.
Additionally, tensions linked to the US-Iran standoff have kept Crude Oil prices close to monthly highs, fueling inflation worries and strengthening expectations for further Fed tightening. According to the CME FedWatch Tool, markets are now pricing in more than a 55% probability of at least one 25-basis-point rate hike in 2026. Philadelphia Fed President Anna Paulson also indicated that additional tightening could be appropriate if economic growth remains strong or inflation risks intensify. Rising US Treasury yields, driven by these expectations, have added further support to the Greenback while pressuring non-yielding assets such as Gold.
Despite the USD’s strength, traders remain cautious ahead of the release of the FOMC Minutes later in the North American session, which could offer fresh guidance on the Fed’s policy outlook. Further developments in the Middle East are also likely to influence market sentiment. Still, the broader fundamental backdrop continues to favor the US Dollar, suggesting that Gold prices may remain vulnerable to additional downside pressure, with any short-term rebounds likely to face renewed selling interest.
Gold Daily Chart
Gold appears set to extend its downward move below the key $4,500 psychological level.
From a technical standpoint, sustained trading beneath the $4,500 mark may serve as a fresh bearish signal and could pave the way for additional losses. Momentum indicators also continue to favor the downside, with the Relative Strength Index (RSI) remaining in the mid-30s and the Moving Average Convergence Divergence (MACD) staying in negative territory.
These signals suggest that bullish momentum is weakening, although Gold still finds support from the longer-term trend line near the 200-day Simple Moving Average (SMA), currently around $4,363.73. A clear break below this support zone could trigger a deeper correction, while maintaining levels above it may help XAU/USD stabilize and preserve its broader bullish trend despite the current weak momentum conditions.
Silver finds it difficult to build on its modest gains during the Asian session near the $79.00 level.
The overall technical picture continues to favor bearish sentiment, supporting the possibility of additional downside.
However, a decisive move below the channel support is required to confirm the bearish outlook.
Silver (XAG/USD) came under renewed selling pressure after a mild uptick during the Asian session toward the $79.00 area, slipping to a fresh intraday low over the past hour. The metal appears to have paused its rebound from the previous session’s one-and-a-half-week low, although it continues to hold relatively firm above the $77.00 level.
From a technical standpoint, the recent break below the 100-period Simple Moving Average (SMA) on the four-hour chart keeps the near-term bias tilted in favor of bears, despite the broader uptrend remaining intact within a rising parallel channel. The lower boundary of the channel around $74.60 serves as key structural support, while the 100-period SMA near $78.02 now acts as immediate resistance against recovery attempts.
Momentum indicators also point to lingering weakness. The Relative Strength Index (RSI) is hovering near 39, while the Moving Average Convergence Divergence (MACD) remains in negative territory, signaling subdued buying momentum and a downside bias within the current range. Still, sellers would likely need a decisive break beneath channel support to strengthen the bearish case.
A confirmed move below the ascending channel floor near $74.60 could undermine the broader bullish structure and trigger a deeper corrective decline. Conversely, a sustained recovery above the 100-period SMA on the four-hour timeframe may pave the way for further upside toward channel resistance around $90.44.
Modern portfolios are no longer forced to choose between stability and rapid growth — investors now expect both.
In mid-January, gold climbed above 4,600 USD per ounce while bitcoin slipped below 92,000 USD, remaining volatile yet still resilient on a year-to-date basis. Both assets continue to attract capital. While they are often portrayed as opposing trades, the reality is becoming more complex. Investors are no longer choosing between gold and crypto — they are allocating to both. The key question is no longer which asset will outperform, but why capital is flowing into both simultaneously, and what that says about global markets in 2026.
Why gold is reaching record highs
Gold’s rise beyond 4,600 USD per ounce reflects more than short-term fear. Central bank behavior has undergone a structural shift. For the first time in decades, gold now accounts for a larger share of global reserve allocations than US Treasuries, highlighting changing views on long-term monetary stability among sovereign institutions.
Institutional demand has followed the same trend. Exchange-traded funds experienced renewed inflows throughout 2025, while central banks continued purchasing gold at elevated levels. This is not simply momentum-driven buying — it is strategic positioning. Against a backdrop of geopolitical tension, concerns over fiscal sustainability, and uncertainty surrounding the future path of interest rates, gold is increasingly viewed as both a hedge and a reserve asset free from counterparty risk.
Expectations of lower interest rates have also strengthened gold’s appeal. Falling yields reduce the opportunity cost of holding non-yielding assets, making gold comparatively more attractive. Meanwhile, a weaker US dollar mechanically supports gold demand outside the United States, reinforcing its role as a global store of value rather than merely a defensive asset.
In this environment, gold is no longer seen solely as an inflation hedge. It has evolved into a broader indicator of policy uncertainty and systemic risk — a form of protection against scenarios that traditional fixed-income assets may no longer hedge effectively.
Why crypto continues to attract demand despite volatility
Bitcoin’s volatility has not stopped capital from returning to the market. Although still trading well below its late-2025 peaks, bitcoin remains structurally elevated, reflecting a different form of investor demand. Unlike gold, its appeal lies not in stability, but in responsiveness.
Crypto markets remain closely tied to liquidity conditions and investor risk appetite. Bitcoin does not consistently function as a safe haven. During periods of acute market stress, it can decline alongside equities. However, when liquidity expectations improve or risk sentiment recovers, bitcoin often rebounds more rapidly — and more aggressively — than traditional assets.
This dynamic positions crypto as a performance-oriented asset rather than a defensive hedge. Investors allocate capital to it when they anticipate improving financial conditions, seek exposure to volatility, or pursue asymmetric upside potential. Institutional access has expanded and market infrastructure has matured, but crypto still retains the high-risk, high-reward characteristics that continue to attract investors willing to tolerate significant fluctuations.
The rise of the mixed portfolio strategy
Perhaps the most important development is not gold’s rally or crypto’s resilience individually, but the fact that investors are increasingly holding both simultaneously. This reflects a portfolio strategy designed for a multi-regime market environment.
Gold acts as a stabilizer during periods of uncertainty, while crypto offers convex upside when conditions improve. Holding both is not contradictory — it reflects an acknowledgment that markets in 2026 are no longer driven by a single dominant narrative. Risk can escalate quickly, but liquidity conditions can also improve just as rapidly. Portfolios positioned for only one outcome risk being exposed to the other.
This blended approach suggests investors are managing not only volatility, but also regime uncertainty. They are hedging against systemic risks while remaining positioned for performance opportunities. It represents a more sophisticated style of portfolio construction — one that balances defensive and offensive exposure dynamically rather than statically.
According to Terence Hove, senior market analyst at Exness, execution quality becomes increasingly important when trading assets with vastly different volatility profiles. He notes that cross-asset strategies depend on reliable trading conditions, especially during macro-driven market events, where spreads, execution precision, and slippage control become critical for traders moving between gold and crypto.
This dual-allocation approach also highlights a practical issue that is often overlooked: switching between defensive and performance assets only works efficiently if trading conditions remain stable across both markets. Otherwise, the transition itself becomes an additional cost. In this sense, broker execution quality becomes part of portfolio construction.
For instance, Exness reported that BTCUSD spreads remained at minimum levels 99.98% of the time, while ETHUSD spreads were reduced by 67%. In highly volatile markets, such consistency can help traders adjust exposure without execution risk becoming the dominant variable.
What this says about market psychology
Simultaneous demand for gold and crypto points to a fragmented macro environment. Markets are neither fully risk-on nor fully risk-off. Instead, investors are positioning for multiple possible outcomes at the same time.
Demand for gold reflects concerns over policy credibility, currency stability, and geopolitical tensions. Demand for crypto reflects expectations that liquidity cycles and structural adoption trends can still drive strong performance. These narratives coexist because the current macro backdrop supports both caution and opportunism.
In that sense, markets are not choosing between fear and growth — they are pricing both simultaneously. The combination of strong gold demand and persistent crypto interest suggests investors are building portfolios capable of absorbing shocks while still participating in upside opportunities when conditions improve.
As 2026 progresses, the relationship between gold and crypto will likely remain fluid, shaped by changes in liquidity conditions, policy expectations, and market stress. Investors who understand the distinct role each asset plays — and who operate within trading environments capable of maintaining stability across asset classes — may be better equipped to navigate the volatility ahead.
WTI extends gains for a third consecutive session as escalating tensions with Iran intensify concerns over potential supply disruptions. President Trump’s latest warning to Iran has heightened fears of a deeper conflict in the Middle East, though a stronger US Dollar may limit further upside in the USD-denominated commodity.
West Texas Intermediate (WTI), the US benchmark for Crude Oil, extends its rally for a third straight session and reaches a two-week high during Monday’s Asian trading hours. The commodity is currently trading near $102.30, gaining around 1.35% on the day, with bullish momentum supported by escalating geopolitical tensions.
In a post on Truth Social, US President Donald Trump warned Iran that “the clock is ticking” and cautioned that there “won’t be anything left” unless action is taken soon, emphasizing that “time is of the essence.” Adding to market concerns, The Times of Israel reported on Saturday that Israel and the US are actively preparing for the possibility of renewed coordinated military strikes against Iran. These developments have heightened fears of a broader Middle East conflict, providing further support for Crude Oil prices.
At the same time, negotiations between the US and Iran remain deadlocked due to major disagreements surrounding Tehran’s nuclear program. Ongoing US restrictions on Iranian ports, along with the effective closure of the Strait of Hormuz, continue to keep a geopolitical risk premium embedded in the market. Concerns over potential disruptions to global Oil supply are also reinforcing bullish sentiment and supporting the recent rebound from monthly lows below $87.00.
However, the stronger US Dollar (USD) could limit additional gains in Oil prices, as a firmer Greenback typically weighs on demand for USD-denominated commodities. Amid renewed US-Iran tensions, expectations that the Federal Reserve may raise interest rates in 2026 have pushed the US Dollar Index (DXY) to its highest level since April 7, potentially discouraging traders from aggressively extending bullish positions in Crude Oil.
Gold prices trade slightly lower near $4,535 during Monday’s early Asian session.
US President Donald Trump stated that his patience with Iran was wearing thin.
Meanwhile, the upside potential for the precious metal appears capped as expectations for further Fed rate hikes continue to strengthen.
Gold prices (XAU/USD) slipped to around $4,535 during Monday’s early Asian session, remaining under pressure as rising inflation concerns tied to the Middle East conflict strengthened expectations for higher US interest rates.
US President Donald Trump on Sunday warned Iran to “get moving” or risk facing further consequences. His visit to China ended without any major trade breakthroughs or meaningful progress toward ending the conflict.
According to Edward Meir, an analyst at Marex, China offered little assistance in easing tensions, while rising crude oil prices continued to support the inflation outlook, weighing heavily on precious metals.
Meanwhile, CNBC reported that the US is urging Iran to abandon its nuclear ambitions and reopen the Strait of Hormuz. At the same time, Iran’s Mehr news agency stated that Washington had provided “no tangible concessions” and was instead seeking gains it failed to secure during the conflict, increasing the likelihood of stalled negotiations.
Market participants have now largely ruled out Federal Reserve rate cuts this year, while expectations for additional tightening have increased, according to CME’s FedWatch Tool. Since Gold does not provide interest income, higher interest rate expectations tend to reduce the metal’s appeal despite ongoing geopolitical uncertainty.
The US Dollar strengthened notably against the Japanese Yen during the week, climbing back above the key ¥158 level. The widening interest rate gap remains a primary factor driving the pair higher, as Japan continues to face limitations in tightening monetary policy too aggressively.
In many ways, this market continues to reward traders who hold US Dollars instead of Japanese Yen, largely due to the attractive yield advantage. The broader sentiment remains bullish, though traders should closely monitor the ¥160 region, as it has previously prompted intervention from Japan’s central bank.
EUR/USD
The Euro fell sharply during the week and now appears likely to move toward the lower end of the broader trading range that has been in place for months. A decline toward the 1.14 level would not be surprising, as that area has served as a major support zone since around March.
In the end, persistent high interest rates in the United States continue to support the bullish outlook for the US Dollar, keeping demand for the currency strong. At the same time, markets increasingly appear to be pricing in the risk of energy-driven inflation shocks across the global economy.
Natural Gas
Natural gas prices moved higher during the week, although the $3 level continues to stand out as a significant resistance zone. Selling into excessive bullish momentum still appears attractive, particularly if prices approach the $3 mark again.
I don’t view this as the beginning of a major or long-term move higher. Instead, it seems more like a short-term “fade the rally” setup, especially since this period of the year typically brings softer natural gas demand.
Crude Oil
The light sweet crude oil market posted strong gains during the week, although price action remains extremely volatile. That instability is likely to persist as traders continue reacting to geopolitical headlines and developments coming out of the Middle East.
Ongoing concerns surrounding energy inflation continue to shape market sentiment, with traders increasingly fearing that further economic pressure could lie ahead before conditions improve. Global markets are also beginning to feel the impact of reduced Middle Eastern oil flows, as previously stored supplies on tankers are gradually being depleted. As a result, crude oil is likely to remain a highly volatile and unpredictable market in the near term.
Bitcoin
Bitcoin declined over the course of the week, but the broader bullish pressure remains intact as the market continues to test higher levels. Notably, Bitcoin showed relative strength while many other assets struggled, marking a shift from its behavior in previous periods when it often moved lower alongside broader market weakness.
Despite elevated interest rates, Bitcoin’s resilience has been difficult to ignore. Under normal circumstances, the market could have experienced a much deeper pullback months ago, yet buyers have consistently stepped in to support prices. Sometimes it is more important to focus on what the market is actually doing rather than what it is theoretically supposed to do, and right now Bitcoin still appears to be attracting buyers.
Gold
Gold prices came under heavy selling pressure during the week, and continued increases in interest rates are likely to remain a major headwind for the market. With prices now trading below the $4,600 level, attention is shifting toward the $4,500 area as the next key support zone.
A break below the $4,500 level could pave the way for a deeper decline toward the 50-week EMA. On the upside, short-term rebounds are likely to face resistance near the $4,800 region, and as long as US 10-year Treasury yields remain elevated, gold may continue to encounter selling pressure.
Silver
Silver endured a very difficult week after initially appearing ready for a major breakout higher. However, the $90 level once again acted as strong resistance, effectively halting the rally. Rising interest rates in the United States have continued to weigh heavily on silver prices, which has historically been a negative factor for the metal over the longer term.
Silver is now forming a very bearish-looking weekly candlestick pattern, which could signal additional downside pressure ahead. A decline back toward the $70 level would not be surprising, as that area has previously served as a major support zone. Overall, silver remains an extremely risky and volatile market at the moment.
USD/MXN
The US Dollar strengthened against the Mexican Peso during the week, although the pair remains stuck within the broader consolidation range that has been in place for some time. The 17.50 level continues to act as a major resistance barrier, while the 17.20 area underneath provides important support.
The pair is likely to remain range-bound for now, as the stronger US Dollar is being offset by the attractive interest rate differential offered by the Mexican Peso. While the Dollar has been gaining against many currencies, the yield advantage in Mexico still encourages traders to sell rallies in USD/MXN. As a result, the market may continue moving sideways until broader macroeconomic uncertainties become clearer.
WTI edged lower after Iranian media reported that 30 vessels had successfully passed through the Strait of Hormuz. Still, crude remains on track for a weekly gain of more than 6% as stalled US-Iran negotiations continue to disrupt traffic through the key shipping route. Meanwhile, the White House noted that President Xi could increase purchases of US oil, potentially helping China reduce its dependence on the Strait of Hormuz.
West Texas Intermediate (WTI) crude remained under pressure on Friday during Asian trading, hovering near $97.60 per barrel after posting modest gains in the previous session. Despite the pullback, WTI is still set for a weekly increase of more than 6%, as diplomatic negotiations aimed at ending the conflict between the United States and Iran continue to stall, leaving the critical Strait of Hormuz effectively shut down.
Oil prices eased slightly after Iranian state media reported that 30 ships had successfully passed through the Hormuz Strait. Nevertheless, investor concerns remain elevated amid ongoing vessel seizures and attacks in the region.
The so-called “dual blockade” of the strategic waterway has become a major obstacle in peace discussions. US President Donald Trump recently described the ceasefire as being on “massive life support” after rejecting Tehran’s latest response to his proposed peace framework.
Meanwhile, a possible change in global energy trade dynamics emerged after a two-hour meeting in Beijing between Presidents Trump and Xi Jinping. According to the White House, Xi signaled interest in increasing Chinese purchases of US crude oil in an effort to diversify energy imports and reduce dependence on the unstable Strait of Hormuz route.
Still, the broader supply outlook remains concerning. The International Energy Agency (IEA) said oil and fuel shipments through the Strait fell by roughly 4 million barrels per day during March and April. The agency also cautioned that even if the conflict is resolved next month, global oil markets may continue facing significant supply shortages through October.
Silver surged above $85 this week after two separate single-session rallies of more than 6% — first on May 7 amid optimism surrounding Iran peace developments, and again on May 11 ahead of the anticipated Trump-Xi summit. The compression in the gold-silver ratio to 55.46, while gold itself remained relatively stable, makes the driver of the rally clear: markets were repricing industrial demand rather than reacting to fear. Around 60% of silver consumption comes from industrial use, much of it tied to supply chains dependent on US-China trade. Investors bid silver higher in anticipation that an extension of trade détente between Washington and Beijing would benefit industries with heavy silver demand.
Beneath the headline rally, however, a more important structural shift emerged on April 29 — one that could have greater implications for silver over the coming year than any individual price spike.
In the April 15 report, it was noted that March’s 3.3% CPI reading reinforced the stagflationary conditions this newsletter has been monitoring. April’s CPI, released on May 12, climbed further to 3.8% — the highest since May 2023 — confirming that the previous month’s inflation surge was not an isolated event. The Federal Reserve is now confronting a difficult combination of persistent inflation and a weakening labor market, and the events of April 29 highlighted how sharply divided policymakers have become over the appropriate response.
The Fed’s Deepest Division in 34 Years — and Why It Matters for Silver
On April 29, the Federal Open Market Committee voted 8-4 to keep interest rates unchanged at 3.50%–3.75%. The breakdown of votes was revealing: three governors argued rates should rise further, while one believed rates should already be cut. During what may be his final press conference as Fed Chair, Jerome Powell described policy as being “at the high end of neutral or perhaps mildly restrictive.” The statement reflected uncertainty rather than conviction — a central bank divided not only on policy direction, but on the broader outlook for the economy itself.
That same day, the Senate Banking Committee advanced Kevin Warsh’s nomination to replace Powell in a narrow 13-11 party-line vote, marking the first fully partisan committee vote for a Fed Chair nomination in modern history. Powell also announced he would remain on the Board of Governors after stepping down as Chair, positioning himself as a potential counterbalance to his successor. The combination of a fractured committee, a politicized leadership transition, and an outgoing Chair staying on the Board has little historical precedent.
A Federal Reserve unable to cut rates without risking higher inflation — yet unable to raise them without damaging growth — is effectively trapped. Historically, periods of monetary paralysis combined with political uncertainty at the central bank have often created favorable conditions for silver outperformance. The historical pattern is compelling enough to warrant close attention.
Three Periods of Fed Paralysis — and Three Major Silver Bull Runs
From 1978 through January 1980, the Federal Reserve repeatedly swung between tightening policy to combat inflation and easing to avoid recession, ultimately failing to fully address either problem. During that period, silver surged from $6.08 to $49.45 — a gain of more than 700% that cannot be explained solely by the Hunt Brothers’ speculative activity. Inflation exceeded 11% in 1974 and climbed above 14% by 1980, according to Federal Reserve data. The key dynamic, as documented by Fed historians, was that policymakers could not raise interest rates aggressively enough to contain inflation without severely damaging employment. Each delay further weakened confidence in the US dollar and pushed capital toward hard assets such as silver.
A similar pattern emerged between 2008 and 2011. The Fed maintained near-zero interest rates while inflation expectations increased and real yields fell into negative territory. Silver climbed from roughly $8.50 at the depths of the financial crisis to nearly $50 by April 2011, marking a gain of around 480%. Although the context differed — this time the Fed was attempting to stimulate a post-crisis economy rather than contain inflation — the underlying mechanism remained the same: a central bank unable to respond decisively contributed to dollar weakness and stronger silver prices.
The 2020–2022 period offered another example. Massive fiscal stimulus collided with a Federal Reserve that reacted slowly to accelerating inflation pressures. Silver rallied from approximately $12 in March 2020 to above $29 by August, more than doubling within five months. The Fed’s delayed tightening response allowed what was initially viewed as temporary inflation to become more persistent, while silver reflected both growing monetary instability and rising industrial demand.
Across all three episodes, the decisive factor was not simply the level of interest rates, but the Fed’s inability to commit firmly in either direction. During the stagflationary 1970s alone, silver gained roughly 1,546% over the decade as inflation averaged 7.4% annually and policymakers consistently lagged behind price pressures.
Today’s environment has not yet reached the extremes of 1979, but the structural similarities are increasingly difficult to ignore. Inflation remains elevated at 3.8%, wage growth has softened to 0.2% monthly, the US fiscal deficit has expanded to $2.065 trillion, and the Fed’s institutional independence is now openly being challenged.
The market reaction on May 8 underscored this shift. Despite a jobs report that exceeded expectations by 85%, the US dollar weakened rather than strengthened. Normally, stronger economic data supports a currency by attracting capital inflows. When a currency declines on positive economic news, markets may be signaling concern that the broader monetary framework is deteriorating faster than headline employment data suggests.
What This Could Mean for Silver
Even after climbing to $85, silver remains roughly 30% below its all-time high of $121.67 reached on January 29. While prices have risen sharply, the underlying structural backdrop remains largely intact. Metals Focus and the Silver Institute forecast a sixth consecutive annual silver market deficit of 46.3 million ounces. Meanwhile, COMEX registered inventories stand at 79.88 million ounces, with the coverage ratio holding at 13.4% — below the 15% stress threshold for a seventh straight month. The World Silver Survey 2026 also projects global silver supply to decline 2% in 2026 even as industrial demand remains above 650 million ounces annually.
The outcome of the Trump-Xi summit remains uncertain, and geopolitical tensions involving Iran are unresolved. After a nearly 13% rally in just two weeks, a short-term correction from the $85 level would not be unusual. Markets rarely move in straight lines.
However, the broader Federal Reserve dynamic described above appears less like a temporary trading catalyst and more like a structural shift in the monetary system — one that has historically created highly supportive conditions for silver. The April 29 FOMC split vote and the partisan confirmation battle surrounding Kevin Warsh did not immediately trigger a silver rally. Instead, they may have altered the long-term framework through which future market movements will be interpreted.
Gold prices traded sideways during Thursday’s Asian session as investors remained cautious ahead of the Trump–Xi summit in Beijing. US President Donald Trump arrived in China for talks with Xi Jinping, with trade tensions and the Iran conflict expected to dominate discussions. Meanwhile, US producer inflation surged at its fastest yearly pace in four years, lending support to the US Dollar.
Gold prices remained largely unchanged during Thursday’s Asian session as investors stayed cautious ahead of the summit between US President Donald Trump and Chinese President Xi Jinping in Beijing. Market attention is also turning to the upcoming US April Retail Sales data due later in the day.
According to Bloomberg, Trump arrived in Beijing on Wednesday for the first state visit to China by a US president in nine years. The meeting comes as Washington and Beijing attempt to stabilize relations amid ongoing geopolitical tensions linked to the Iran conflict.
The US and China are reportedly exploring a framework that would allow both countries to reduce tariffs on approximately $30 billion worth of goods without compromising national security concerns.
Meanwhile, US producer inflation rose at its fastest annual pace in four years, strengthening expectations that the Federal Reserve will keep interest rates elevated to contain persistent inflation pressures.
Data from the US Bureau of Labor Statistics released on Wednesday showed that the Producer Price Index (PPI) climbed 6.0% year-over-year in April, up from 4.3% in March and above market forecasts of 4.9%. On a monthly basis, PPI increased 1.4% after a 0.7% gain in March, significantly exceeding expectations of 0.5%.
Wholesale inflation reached its highest level since December 2022, largely driven by surging oil prices amid Middle East tensions. The stronger inflation data reinforced expectations that the Federal Reserve will maintain higher interest rates for longer, which could pressure Gold prices. Although Gold is often viewed as a safe-haven asset during geopolitical uncertainty, higher interest rates reduce its appeal because the metal does not offer yield.
Gold Daily Chart
Technical Analysis
On the daily chart, XAU/USD is trading near $4,690 and continues to show a slightly bearish tone while remaining below the 100-day simple moving average (SMA). The metal is hovering just above the Bollinger Band midpoint, indicating short-term support within the current trading range. Meanwhile, the Relative Strength Index (RSI) stands at 49.65, reflecting neutral momentum and signaling consolidation rather than a strong directional move.
To the upside, the first resistance level is located near the 100-day SMA around $4,790. Additional gains could face resistance near the upper Bollinger Band at roughly $4,838 if bullish momentum strengthens further. On the downside, initial support is found around the Bollinger midpoint near $4,680, followed by a stronger support area close to the lower Bollinger Band around $4,518, where any deeper correction may begin to stabilize.
In the currency markets, Tuesdays have historically tended to favor government-issued fiat currencies over gold — though not consistently — and today happens to be Tuesday.
Fiat currencies may experience periods of strength — even lasting for years — but in the long run, they have consistently underperformed gold.
The weekly chart of gold versus fiat currencies continues to display a flag-like consolidation pattern, one that still appears to favor the bullish side.
The projected breakout target from this formation is estimated to be in the $8,000–$9,000 range.
Analysts across the gold market are debating both the origin of the flag pattern and the catalyst that could ignite the next major rally. The prevailing narrative from mainstream media and bank analysts has been that escalating US military involvement in Iran has pushed oil prices higher, increasing expectations that the Federal Reserve could raise interest rates. Because gold yields no interest while fiat currencies do, this dynamic has temporarily supported fiat over gold.
Some observers also argue that further downside pressure has come from the central banks of Iran and Russia, which may be selling gold reserves to offset declining fiat revenues and the financial strain caused by ongoing conflict.
Meanwhile, the Indian government has introduced additional taxes on bullion bank imports, encouraged citizens to reduce gold purchases, and is reportedly considering another increase in import duties.
Although the Federal Reserve has implemented some quantitative easing this year, the scale has been relatively limited.
It is worth noting that during 2010–2011, the Fed’s balance sheet expanded only modestly, yet gold prices surged sharply. In contrast, throughout 2024–2025, the Fed’s balance sheet actually contracted, but gold still dramatically outperformed fiat currencies. Why?
Commercial “QE” in the form of bank lending continues at an aggressive pace and far exceeds government-led quantitative easing. The expansion of private credit and money supply remains one of the key forces driving fiat currencies into a long-term decline against gold.
In the end, gold is an exceptionally complex form of money influenced by many different factors. Asian import duties, seasonal festivals, geopolitical conflicts, interest rates, and bank credit growth all play a role in determining gold’s fiat price.
A strong argument can be made that gold is not consistently predictable. Many analysts spend enormous effort trying to forecast movements that, in reality, may be inherently difficult — if not impossible — to predict accurately.
That uncertainty itself is one of the main reasons why millions of experienced gold investors across Asia and the West concentrate less on short-term forecasting and more on accumulating what they view as the “ultimate form of money” whenever prices weaken.
Maintaining focus on the broader macro picture is increasingly important as investors navigate persistent inflation, tariffs, the 2021–2025 geopolitical conflict cycle, elevated stock market valuations, debt ceiling concerns, and the ongoing shift in global economic power.
Although gold’s short-term direction is often unpredictable, key buying and selling zones can still be identified for both investors and traders. No one can know with certainty whether gold will reach a particular level, but if those zones are tested, market participants in the precious metals space are expected to accumulate aggressively. Historically, such phases have often led to dramatic outperformance by gold mining stocks relative to bullion itself.
I’m frequently asked, “When will mining stocks outperform gold?” My response is simple: “Whenever they enter a major buy zone. That’s where the strongest outperformance begins.”
Expecting long-term dominance from high-flying Nasdaq growth stocks over the Dow isn’t always realistic. However, when those stocks are purchased during pullbacks that bring the broader market into major support areas, they can generate remarkable gains within just a month or two — returns that the overall market might otherwise take years to produce.
The same principle applies to precious metals miners, often to an even greater degree. As a general rule, gold, silver, and copper mining stocks can deliver unleveraged fiat gains of 20% or more within one to two months after being bought at the right zones.
This year, the VanEck Gold Miners ETF has already experienced two strong periods of outperformance relative to gold bullion, and a third wave — potentially underway now — could produce even larger gains for gold-stock traders and investors.
Silver mining stock investors have also enjoyed exceptional gains this year, with the two major buy zones delivering rallies of 20% or more.
The rapid expansion of AI infrastructure and robotics is transforming copper into what some investors now call the “new oil.” The old slogan, “Drill, Baby, Drill!” may eventually evolve into, “Drill, Bonehead, Drill” — unless the drilling is for copper.
For copper stock investors, the key buy zones closely mirror those seen in gold and silver mining shares. The gold $4,400 support zone and the Dow 45,000 support zone were highlighted as attractive accumulation areas for miners before prices moved into those levels.
Historically, mining-stock ETFs and individual mining companies tend to stabilize around major support zones in both gold and the Dow. From those areas, they have often launched into powerful rallies.
The bottom line is straightforward: gold remains, in the eyes of many investors, the world’s premier form of money, while gold, silver, and copper mining stocks can become exceptional vehicles for outperformance — provided they are accumulated with patience, discipline, and careful timing.
Silver gains support from its critical use in solar panels, electronics, and automotive manufacturing.
However, the precious metal could face pressure as escalating geopolitical tensions and possible disruptions in the Strait of Hormuz push oil prices and inflation higher.
Meanwhile, stronger-than-expected US inflation data has reinforced expectations that the Federal Reserve may keep interest rates elevated for longer to contain persistent inflationary pressures.
Silver prices (XAG/USD) extended their rally for a sixth consecutive session, trading near $86.80 per troy ounce during Wednesday’s Asian session. Growing industrial demand continues to support the metal, as Silver remains widely used in the manufacturing of solar panels, electronics, and automotive components.
Despite the strong upward momentum, geopolitical tensions could pose a major challenge to Silver’s advance. Concerns over a prolonged closure of the Strait of Hormuz may keep oil prices elevated, intensifying inflation pressures worldwide. This environment could encourage central banks to maintain higher interest rates for longer, reducing the attractiveness of non-yielding assets such as Silver as investors shift toward yield-bearing investments.
Tensions in the Middle East remain heightened after comments from US President Donald Trump, who stated that Iran is “under control” while warning that the situation could end either with a new agreement or complete “decimation.” Meanwhile, Iranian Deputy Foreign Minister Kazem Gharibabadi reiterated that any credible peace deal must involve compensation payments, recognition of Iran’s sovereignty over the Strait of Hormuz, and the removal of all US sanctions.
On the economic front, inflation concerns intensified after the US Bureau of Labor Statistics released stronger-than-expected April Consumer Price Index (CPI) data on Tuesday. Headline CPI rose 0.6% month-over-month, lifting annual inflation to 3.8%, the highest reading since May 2023. Core CPI, which excludes food and energy prices, also climbed 2.8% year-over-year. The data strengthened expectations that the Federal Reserve will likely keep interest rates elevated for an extended period in an effort to curb persistent inflation.
WTI prices climb toward $95.70 during Tuesday’s early Asian trading session, supported by rising US-Iran tensions and growing concerns over potential disruptions in the Strait of Hormuz. Meanwhile, markets are also watching as Trump is expected to arrive in Beijing later this week.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading near $95.70 during Tuesday’s early Asian session, extending gains as renewed geopolitical tensions in the Middle East support oil prices.
According to CNN, US President Donald Trump has become increasingly dissatisfied with Iran’s approach to negotiations aimed at ending the conflict. Some of Trump’s advisers reportedly believe he is now more open to restarting major military operations than at any point in recent weeks.
At the same time, Iranian Parliament Speaker Mohammad Bagher Ghalibaf stated that Iran’s military is fully prepared to respond to any future attacks. The remarks followed Trump’s rejection of Tehran’s latest peace proposal over the weekend, describing it as “simply unacceptable.” Concerns over a potential prolonged disruption of the Strait of Hormuz — a key global energy shipping corridor — continue to provide support for WTI prices.
Meanwhile, Trump and Chinese President Xi Jinping are expected to meet on Thursday and Friday during Trump’s first visit to China since 2017. The two leaders are set to hold their first in-person talks in more than six months as both sides attempt to ease tensions linked to trade disputes, the US and Israeli conflict with Iran, and broader geopolitical disagreements.
Market participants are also awaiting the release of the American Petroleum Institute (API) crude oil inventory report later on Tuesday. A larger-than-expected decline in inventories could signal stronger demand and further support WTI prices, while a surprise increase in stockpiles may point to weaker demand or oversupply, potentially pressuring crude prices.
The gold market initially pulled back during the week but later rebounded and regained strength. The $4,600 level remains a key area to watch closely, as it has repeatedly acted as both support and resistance in the past.
Gold still appears to have solid potential to gradually move higher, although interest rate markets continue to create headwinds. In this environment, gold is likely to remain volatile and range-bound in the short term. Despite that, the longer-term outlook still looks strongly bullish, and I believe the market could eventually reach the $5,000 level. However, that would likely require several supportive factors to align, including a de-escalation of tensions in the Middle East.
USD/CHF
The US dollar initially strengthened against the Swiss franc but has since pulled back quite sharply. The pair is now testing a potential support zone around the 0.7750 level. Among the major currency pairs, this is one where I still favor the US dollar over the longer term. However, falling interest rates and growing concerns that geopolitical conflicts could escalate are boosting demand for safe-haven assets like the Swiss franc.
Ironically, if geopolitical tensions ease and peace returns, interest rates in the United States may decline, but demand for the safe-haven Swiss franc would likely weaken as well. As a result, this pair is expected to remain heavily influenced by headlines and market sentiment. Over the longer term, however, I still believe USD/CHF has room to move higher.
EUR/USD
The euro initially moved lower before rebounding and showing renewed strength. However, the pair continues to face strong resistance around the 1.18 level, extending up to 1.1850. The 1.1850 zone has remained a significant area of selling pressure, keeping the market contained since the summer of last year.
Going forward, we will need to see whether EUR/USD can finally break above this resistance zone, especially since the pair has attempted to do so several times already. Each breakout attempt, however, has been met with heavy selling pressure that quickly pushes the market back down. For now, I suspect the broader trading range will continue to hold.
BTC/USD
Bitcoin moved higher during the week but later surrendered part of its gains. Even though the latest candlestick resembles a shooting star, it is important to note that the previous candle formed a hammer pattern. This combination suggests that Bitcoin could enter a period of sideways consolidation in the near term.
A break above the $84,000 level would be a strong bullish signal and could pave the way for a much larger upward move. In the meantime, I believe short-term pullbacks will likely continue to attract buyers, with many traders viewing dips as potential buying opportunities.
USD/ZAR
If you were searching for volatility, the South African rand certainly delivered during the week. The pair initially attempted to move higher, but later turned lower as the US dollar continued to weaken. That remains the key theme in this market — traders are likely to keep selling into short-term rallies, especially as the interest rate differential continues to favor South Africa and is expected to do so for the foreseeable future.
With that in mind, I believe the market will likely drift back toward the 16.20 level over time, although the move is expected to be gradual rather than aggressive. In the end, this remains more of a carry trade environment, where traders are primarily focused on earning positive swap returns.
NASDAQ 100
The Nasdaq 100 continues to defy gravity and now appears extremely overbought. The index remains locked in a remarkably strong uptrend, but sooner or later, a sizable pullback is likely to occur — one that could catch overly aggressive or greedy traders off guard.
That said, I believe the 28,000 level will be a key area to watch, as many traders are likely to look for signs of support and renewed buying interest if the market pulls back toward that zone.
USD/MXN
The US dollar has remained weak against the Mexican peso for quite some time. The 17.50 level continues to act as a significant resistance barrier, as it has repeatedly attracted strong selling pressure in the past. Overall, the pair still appears to be trapped within a broader trading range, with support near 17.20 and resistance around 17.50.
Ultimately, I believe that if USD/MXN can break above the highs of the last two weekly candlesticks, it could open the door for a move toward the 18.00 level. However, such a rally would likely require a broader risk-off or fear-driven market environment. For now, the overall setup still appears to favor a “sell the rally” approach rather than a sustained bullish trend.
USD/JPY
The US dollar traded in a highly volatile manner against the Japanese yen throughout the week, following last week’s intervention by the Bank of Japan.
That said, the pair is beginning to form a candlestick pattern that suggests stabilization, indicating there is a genuine possibility of another move higher. A breakout above the 160.50 level — or potentially even the 162.00 region — could pave the way for fresh multi-decade highs, with resistance levels stretching back to 1990.
The precious metal has been supported by speculation of a potential de-escalation in Middle East tensions.
At the same time, markets are also reacting to reports that the US and Japan could pursue coordinated currency intervention.
The US dollar recovered from earlier selling pressure amid lingering uncertainty over a rapid resolution to the Middle East conflict, alongside stronger-than-expected US economic data. ADP reported a 109K increase in private sector employment in April, marking the strongest reading since the beginning of 2025. The resilience in the labour market, combined with persistent inflation pressures, helped the DXY rebound 0.5% from its intraday lows, recovering roughly half of its earlier losses on Wednesday. However, the recovery proved short-lived.
Markets are also focused on renewed US–Iran diplomatic efforts, with talks expected to resume by 15 May. As often seen in geopolitics, markets tend to price in outcomes ahead of confirmation. Rumours of de-escalation initially pushed EUR/USD to its highest level since February near 1.1800, before subsequent uncertainty triggered a pullback.
At the same time, geopolitical risks are increasingly seen as more damaging for Europe than for the US. Additional pressure comes from renewed tariff threats by Donald Trump, including potential increases on European auto imports from 15% to 25%. Slowing growth combined with inflationary pressure from higher energy costs is raising stagflation concerns in the eurozone, forcing the ECB into a more cautious policy stance. Even if further rate hikes occur, they are expected to be limited, leaving interest rate differentials supportive of the US dollar and capping EUR/USD upside.
Beyond geopolitics, currency markets are also reacting to developments in Japan. While fundamentals favour a stronger US dollar versus the yen, any coordinated effort to weaken the dollar could impose significant strain on Tokyo. Discussions around possible joint intervention—drawing comparisons to the 1985 Plaza Accord—have resurfaced, with US officials expected to meet Japanese counterparts to discuss foreign exchange stability.
Meanwhile, gold has benefited from easing Middle East tensions, posting its strongest daily gain since late March. The metal is also supported by shifting inflation expectations following the decline in oil prices, which reduces the likelihood of aggressive Fed tightening into 2026. However, upcoming US data releases remain a key catalyst, and any downside surprise could provide fresh momentum for further upside in gold.
Silver extends its rally for a third consecutive session and stays poised to post weekly gains.
The broader technical outlook continues to support bullish momentum and suggests further upside potential.
Any notable pullback is likely to attract dip buyers and could remain relatively limited.
Silver (XAG/USD) rebounds after an Asian-session dip below $78.00, reversing part of the previous session’s late decline from a near three-week peak. The metal regains the $80.00 psychological level and remains set for strong weekly gains.
From a technical standpoint, the bias stays constructive as price holds above the 100-period SMA and has recovered the 50% Fibonacci retracement of the March decline. Momentum signals also support the bullish view, with RSI near 68 and MACD remaining above the zero line—indicating buyers still dominate despite emerging overbought conditions.
That said, a sustained break above the 61.8% Fibonacci level and a move beyond $83.00 would be needed to confirm the next leg higher. If achieved, upside targets shift toward the 78.6% retracement near $88.83 and the previous swing high around $96.44.
On the downside, initial support sits at $78.66 (50% retracement), followed by the 100-period SMA near $76.26 and the 38.2% level around $74.47, where dip-buying interest may re-emerge before the broader uptrend is challenged.
Huge swings across USD/Asia as Japan’s MOF keeps intervening in USD/JPY, while Axios continues to publish reports pointing to progress on an Iran deal. It’s difficult not to view the headlines with some skepticism, but markets react sharply to every update, making them impossible to ignore. Regardless of how the probabilities around an Iran resolution are assessed, the market response has been so significant that questioning the credibility of the news flow becomes secondary.
My long USD/CHF position has taken a heavy hit as the US Dollar tumbles alongside a sharp decline in oil prices. USO, the oil ETF, is down 11% today after Monday’s attacks on the UAE had traders positioned for a bullish breakout in crude that ultimately never materialized.
There still appears to be plenty of downside room before crude finds meaningful support. I’m using USO as the reference here, though the broader oil futures curve shows a very similar setup. Fresh optimism over a potential end to active conflict in the Middle East has fueled another rally in AI capex-related names, though it hasn’t translated into stronger USD demand as Japan’s MOF remains active and concerns over stagflation-driven rate hikes from the ECB and other central banks continue to ease.
Apparently, the launch of the DRAM ETF was not the top for memory stocks after all.
SanDisk has now turned into a 35-bagger over the past year, soaring from $40 to $1,400 in just 12 months.
USD/JPY
Interesting setup in USD/JPY. My initial strategy — selling into the 157.19–157.94 area in anticipation of MOF-driven upside exhaustion — turned out to be the correct call, but I got thrown off by a competing view that nonfarm payrolls would likely surprise to the upside. In hindsight, that was probably something to focus on Thursday rather than Monday. The chart still shows the former major low zone around 157.30–157.80 acting as resistance, and the repeated interventions suggest the MOF is serious about defending the area.
Here’s the 5-minute chart. It’s hard to say with certainty that every sharp drop was driven by the MOF, but several of them likely were.
I’m staying on the sidelines for now. Going long here makes little sense regardless of one’s NFP outlook, while shorting at the bottom of the range is equally unattractive. At this point, the MOF simply needs to keep hovering above 157.50 while hoping for lower yields and softer oil prices.
With the VIX sitting at 16.4 and oil down 10%, the hawkish Trump mean-reversion trade — long oil and long USD — probably offers positive expected value. The problem is that there’s still no concrete timeline attached to the latest “deal” or MOU narrative, making risk management on long oil positions extremely difficult.
In hindsight, I was too focused on NFP too early, if it even deserved attention at all in this environment. With oil and MOF activity overwhelmingly driving FX flows, concentrating on payrolls four days ahead of the release now feels misplaced.
Extend this analysis
In recent weeks, a 50/50 barbell trade pairing semiconductors and oil has gained traction, with several bank strategists and Substack writers pitching it as a modern alternative to the traditional 60/40 stocks-and-bonds risk parity framework. In hindsight, the trade has delivered exceptional performance and offers some attractive characteristics: it largely sidesteps direct exposure to the U.S. consumer while remaining relatively resilient to stagflation pressures and tightening financial conditions.
That said, assuming the strategy will continue to work simply because it has worked recently feels like a dangerous exercise in extrapolation. Much of the enthusiasm may reflect performance chasing rather than a durable structural edge.
The following charts take a simplified approach by comparing a portfolio of 100*XLE + SOX against the Advance Research Risk Parity Index (RPARTR). I chose this particular risk parity benchmark because its data extends back to 1998, though using more sophisticated methodologies would likely produce a broadly similar picture.
The SOX+XLE barbell began outperforming after Russia’s latest invasion of Ukraine and continued to hold up even as oil prices eased post-Ukraine, largely because ChatGPT accelerated the AI capex boom. Still, after two wars and three years of markets pricing in the LLM theme, it’s difficult to argue that the trade still offers especially attractive risk/reward. Time will tell.
Traditional risk parity, meanwhile, outperformed across nearly every longer-term horizon except the past few years. The chart on the right indexes both strategies to January 1999 = 1, while the second chart highlights the performance gap between the two indexed series.
Worth keeping in mind.
Closing thoughts
EUR/USD is basically trading like oil.
Check who took the mound for the Cardinals on May 3 — Dustin May, wearing No. 3.
WTI struggles to build on the previous day’s rebound from a more than two-week low as traders await further clarity on a potential US-Iran peace deal. A weaker US Dollar, however, helps cushion downside pressure on the commodity.
West Texas Intermediate (WTI), the US crude oil benchmark, trades sideways during Thursday’s Asian session after rebounding modestly from a more than two-week low below $87.00 in the previous session. The commodity hovers around the mid-$92.00s, down roughly 0.65% on the day, as traders weigh mixed market signals.
Oil prices remain pressured by optimism surrounding a possible US-Iran peace agreement and the reopening of the Strait of Hormuz after US President Donald Trump said a deal with Iran was highly possible. However, losses are limited as investors continue to question the likelihood of a final agreement. Additional support for crude comes from a broadly weaker US Dollar, which tends to benefit dollar-denominated commodities.
Iranian state-linked media rejected reports suggesting a broader agreement had been reached, while the Iranian Students’ News Agency stated that the US proposal contains terms Tehran has already refused. The BBC also reported that Iran is still reviewing the US proposal aimed at ending the conflict and lifting the American blockade on Iranian ports. At the same time, Trump warned that Iran could face attacks “at a much higher level and intensity” if it refuses a peace deal.
On the macro side, the positive impact of the stronger-than-expected US ADP private employment report faded quickly as markets continued to scale back expectations for a Federal Reserve rate hike in 2026. Softer hawkish expectations have kept the US Dollar under pressure after its rebound from a near three-week low, discouraging traders from making aggressive bearish bets on crude oil and prompting caution over further downside.
Gold draws buyers for a second consecutive session as optimism over a potential US–Iran peace agreement weakens the US dollar. Easing inflation concerns also dampen expectations of aggressive Fed tightening, supporting demand for the metal, while traders await the US ADP report for fresh direction ahead of Friday’s Nonfarm Payrolls release.
Gold (XAU/USD) holds firm near a more-than-one-week high, staying above $4,650 as the European session begins on Wednesday. A broadly weaker US Dollar—pressured by growing optimism over a potential US–Iran peace agreement—has supported the metal’s rebound from Monday’s one-month low around $4,500. At the same time, falling crude oil prices are easing inflation concerns and reducing expectations of a more aggressive Federal Reserve, further boosting demand for the non-yielding asset for a second consecutive day.
On the geopolitical front, US President Donald Trump announced a temporary pause in “Project Freedom,” the military effort to escort commercial vessels through the Strait of Hormuz, to allow room for negotiations with Iran. He noted meaningful progress toward a comprehensive deal, echoing earlier remarks from Defense Secretary Pete Hegseth that the US is not seeking renewed escalation and that the ceasefire with Iran remains intact. Additionally, Secretary of State Marco Rubio confirmed the conclusion of “Operation Epic Fury,” a joint US–Israel campaign launched on February 28.
These developments have strengthened expectations of a peace agreement that could end the US-Israeli conflict involving Iran and reopen the strategically crucial strait, lifting investor sentiment while weighing on the dollar’s appeal. Meanwhile, oil prices have dropped to a one-week low, helping to curb fears of rising inflation and allowing the Fed to maintain a more cautious policy stance. Still, according to CME Group’s FedWatch Tool, markets are pricing in more than a 35% chance of a rate hike by year-end, which may limit further downside in the USD and cap gold’s near-term upside.
Given this backdrop, traders may wait for stronger follow-through buying before confirming that gold has formed a bottom near $4,500 and positioning for additional gains. Attention now turns to the US ADP private employment report later in the North American session, along with remarks from key FOMC officials and ongoing geopolitical updates. The primary focus, however, remains Friday’s closely watched US Nonfarm Payrolls report, which is expected to play a decisive role in shaping the near-term outlook for both the dollar and gold.
Gold H4
Gold bulls remain in control as long as prices hold above the 200-period SMA breakout level on the H4 chart. The metal’s solid rebound from the $4,500 region—near the 50% retracement of the March–April rally—combined with a move above $4,600, supports a bullish outlook. Prices are now approaching the 200-period SMA at $4,651.69, which serves as the next key resistance.
Momentum indicators reinforce the positive bias. The RSI sits around 59, suggesting steady strength without entering overbought territory, while the MACD histogram remains positive and continues to rise, pointing to building bullish momentum as gold tests overhead resistance.
On the downside, immediate support is located at the 38.2% Fibonacci retracement level around $4,588.83. Further declines could find buying interest near the 50% level at $4,495.62, followed by the 61.8% retracement around $4,402.41. A decisive break below this last level would invalidate the bullish setup and shift the near-term outlook back in favor of the bears.
MUFG’s Michael Wan says Brent crude has slipped below US$110 per barrel after President Trump halted a US-backed operation to assist vessels leaving the Strait of Hormuz, as negotiations with Iran continue. He emphasizes that disruptions in the Strait go beyond oil prices, potentially triggering wider shortages in products such as energy, petrochemicals, and fertilizers—placing import-reliant economies at greater risk.
Hormuz tensions pressure Brent Oil
“Brent crude dropped under US$110/bbl and the Dollar weakened after President Trump announced a pause in a US-led mission to help stranded ships leave the Strait of Hormuz, allowing time to see whether a deal with Iran to end the conflict can be reached.”
“More broadly, as we’ve noted over the past two months, the implications of disruptions in the Strait of Hormuz extend beyond oil, raising the risk of shortages across a wide range of goods, including energy, petrochemicals, and fertilizers.”
“Countries that rely heavily on Middle Eastern oil, have limited ability to shift to domestic energy sources, and depend more on imported energy and food are generally more exposed to various risk scenarios.”
As the U.S. conflict with Iran moves into its third month, markets have largely steadied following early fears of disruption to the energy sector and oil prices. Still, the evolving political landscape—including a ceasefire that has been in place since early April—continues to inject a high degree of uncertainty. Should the truce break down and tensions escalate again, investors could see renewed volatility.
One approach to navigating this uncertainty is through exchange-traded funds (ETFs), which offer exposure to sectors that may benefit from shifting conditions. Below are two funds to consider, depending on whether your outlook on developments in the Middle East is more optimistic or cautious.
A Cost-Effective, Highly Liquid Way to Gain Crude Oil Exposure
The United States Oil Fund LP is among the most widely used exchange-traded products for investors seeking exposure to oil. Structured as a commodity pool, USO invests in oil futures contracts to mirror daily price movements of light, sweet crude—an oil type that dominates production in the U.S., making the fund closely linked to the domestic energy market.
USO carries an expense ratio of 0.60%, which is relatively low compared to many similar funds. It also stands out for its strong liquidity, with an average monthly trading volume exceeding 27 million shares. Although it isn’t the largest fund by assets—managing roughly $1.9 billion—it remains highly active in the market.
These characteristics make USO especially appealing for short-term traders. Its ability to capture near-term price swings in crude oil is a key advantage, though its reliance on futures contracts exposes it to contango, which can erode returns over time. As such, it may not be the best choice for long-term, buy-and-hold strategies tied to developments in the Iran conflict.
That said, if oil prices continue climbing—something that could happen if the ceasefire collapses and tensions escalate—USO offers a practical way for investors to capitalize on that upward movement.
An Airline-Focused ETF Positioned to Rebound if Fuel Markets Stabilize
Investors anticipating a de-escalation in geopolitical tensions may turn their attention to one of the sectors hit hardest by the conflict: aviation. Airlines have faced mounting challenges, from volatile jet fuel costs and supply constraints to disruptions in routes and operations driven by regional instability.
The U.S. Global Jets ETF tracks a basket of companies tied to the air travel industry, encompassing not just airlines but also firms involved in aircraft manufacturing, maintenance, and related services.
While the fund has global exposure, it leans heavily toward U.S.-based companies and includes many of the world’s largest carriers. Major holdings such as Delta Air Lines, American Airlines, and United Airlines together account for roughly one-third of its portfolio.
JETS stands out for its pure focus on aviation, unlike broader transportation ETFs. This specialization could make it particularly attractive to investors who expect improving diplomatic relations between the U.S. and Iran. However, its year-to-date performance—down around 8% in 2026—suggests that tensions have yet to ease meaningfully.
The fund carries an expense ratio comparable to that of USO and manages a relatively modest asset base of about $725 million, along with lower trading volumes—typical for a niche ETF. It also pays a dividend, though with a yield of roughly 0.5%, income generation is more of a secondary benefit than a primary draw.
More broadly, a sustained ceasefire or an end to the conflict could lift a range of ETFs. Industries with high sensitivity to oil prices would likely see the strongest upside. Even diversified funds focused on developed or emerging markets could benefit if key shipping routes like the Strait of Hormuz reopen and global trade flows return to normal, helping stabilize both energy markets and the wider economy.
WTI weakens as concerns over supply disruptions subside, with the US Navy taking steps to reopen the Strait of Hormuz.
Maersk reported that its US-flagged vehicle carrier, Alliance Fairfax, successfully transited the strait under US military escort.
Meanwhile, Iran launched drone and missile attacks on the UAE, and the US stated it had destroyed Iranian boats in the Hormuz region.
West Texas Intermediate (WTI) crude edges slightly lower during Tuesday’s Asian session, hovering near $101.80 per barrel after posting modest gains a day earlier. Prices are under pressure as immediate supply disruption fears ease, with the United States Navy working to restore traffic through the crucial Strait of Hormuz following Iran’s attempted shutdown.
On Monday, Washington initiated a fresh operation to reopen the waterway, and Maersk later confirmed that its US-flagged vehicle carrier, Alliance Fairfax, successfully exited the strait under US military escort.
According to Reuters, Tim Waterer, chief market analyst at KCM Trade, noted in an email that the incident demonstrates limited safe passage is still possible under current conditions, easing worst-case supply concerns. However, he cautioned that it appears to be an isolated case rather than a sign of a full reopening.
Even so, tensions remain elevated after Iran launched drone and missile strikes on the United Arab Emirates (UAE). CNBC reported that the US also destroyed Iranian boats in the Strait of Hormuz. US President Donald Trump warned that Iran would face severe consequences if it targeted American ships protecting commercial traffic in the area.
Meanwhile, Iran’s Foreign Minister Abbas Araghchi stated that the situation in the Strait of Hormuz underscores the absence of a military solution to what he described as a political crisis. He added on X that as diplomatic efforts—supported by Pakistan—continue, the US should avoid being drawn deeper into conflict, warning that “Project Freedom is Project Deadlock.”
Gold edges higher with modest gains, but the broader fundamentals suggest caution for bullish traders.
Persistent inflation concerns are reinforcing expectations of more hawkish central bank policies, weighing on the metal.
Meanwhile, rising US-Iran tensions bolster the US dollar’s safe-haven appeal, adding further pressure on gold.
Gold (XAU/USD) picks up some buying interest during Tuesday’s Asian session, partially recovering from the previous day’s drop to around the $4,500 level—its lowest in over a month. However, the rebound lacks a clear fundamental driver and could fade quickly, suggesting traders should remain cautious before expecting any sustained upside. Ongoing US-Iran tensions continue to stoke inflation fears and reinforce expectations of higher interest rates, which, alongside a stronger US Dollar (USD), is likely to cap gains in the non-yielding metal.
The fragile ceasefire between the US and Iran appears close to breaking down after renewed violence in the Persian Gulf on Monday. Both the United Arab Emirates (UAE) and South Korea reported attacks on vessels in the critical shipping lane, while the UAE confirmed a fire at the Fujairah oil port following Iranian missile and drone strikes. US President Donald Trump warned that Iran would face devastating consequences if it targeted American ships escorting vessels through the region under the “Project Freedom” initiative.
These developments heighten the risk of further escalation in the Middle East, pushing crude oil prices higher and reinforcing concerns that rising energy costs could reignite inflation. This, in turn, strengthens expectations that major central banks—including the US Federal Reserve (Fed)—may adopt a more hawkish policy stance. Data from CME Group’s FedWatch Tool now shows the probability of a Fed rate hike by year-end at around 35%, up sharply from below 10% last Friday.
The outlook supports higher US Treasury yields, which continue to underpin the USD. Additionally, tensions around the Strait of Hormuz further enhance the dollar’s appeal as a global reserve currency, adding to the bearish near-term outlook for gold. As a result, any upward moves in the metal are likely to attract selling interest, and traders may prefer to wait for stronger, sustained buying before concluding that gold has formed a bottom.
Gold (XAU/USD) 4-hour timeframe chart
Gold may find it difficult to build on its intraday gains given the prevailing bearish technical structure.
From a chart standpoint, XAU/USD continues to show a short-term negative bias as it remains below the 200-period Simple Moving Average (SMA) at $4,655.02. The metal is also constrained by the 38.2% Fibonacci retracement of the March–April rally, keeping prices trapped beneath a strong resistance zone despite a slight rebound from the $4,500 region, which aligns with the 50% retracement level.
Momentum signals are still weak, with the Relative Strength Index (RSI) staying below the neutral 50 mark at 39.84 and the Moving Average Convergence Divergence (MACD) lingering in negative territory. This suggests the current recovery attempt could lose steam near the 38.2% Fibonacci level at $4,595.23. Any further upside is likely to face resistance around the 200-period SMA at $4,655.02, followed by the 23.6% retracement at $4,711.12.
On the downside, immediate support is seen near the 50% retracement at $4,501.57, ahead of the 61.8% level at $4,407.90. If selling pressure intensifies, deeper support levels come into view at $4,274.55 and $4,104.68.
The NASDAQ 100 has delivered another strong week, but the key question now is whether it can sustain further upside momentum. Despite the gains, the market remains highly volatile and choppy, making it difficult to confidently chase prices at these elevated levels.
I believe dips will present buying opportunities that many traders will look to capitalize on, but for now, patience is essential. When a market is this strongly bullish, it can be challenging to navigate effectively.
USD/JPY
The US dollar dropped sharply against the Japanese yen on Thursday amid intervention, but overall, the market likely needs to stabilize before traders feel confident enough to start buying the dollar again.
Ultimately, the Japanese central bank has limited ability to keep the yen stable. Japan’s heavy debt burden makes it extremely difficult to sustain higher interest rates. As a result, I expect the market to reverse course and move back toward previous highs.
EUR/USD
The euro dipped early on, then rebounded, but ultimately surrendered much of its gains by the end of the week, reflecting ongoing choppy and erratic price action.
Given this setup, it appears that the 1.18 level marks the start of a significant resistance zone, likely extending up to around 1.1850. On the downside, the 1.1650 level remains a key area to watch, with a break below potentially opening the door toward 1.15.
BTC/USD
Bitcoin initially declined during the week but later rebounded, showing signs of recovery. As a result, the formation of a weekly hammer isn’t particularly surprising, given the strong resilience the market has consistently demonstrated.
It has climbed for most of the conflict, which is likely the first clear indication that something meaningful is happening beneath the surface. Bitcoin now appears to be targeting the $84,000 level, though reaching it will likely be a tough battle rather than an immediate move.
USD/CAD
The US dollar has traded in a choppy manner against the Canadian dollar this week, remaining within a well-established range. The 1.35 level continues to act as support, while the 1.3750 level serves as resistance above.
Friday saw a modest rebound from the lower end of the range, reinforcing the idea that “buy the dip” behavior may continue—at least until price breaks above the 1.3750 level. If that resistance is cleared, the upside could accelerate significantly, potentially pushing toward 1.40 over time, though such a move is unlikely to happen quickly.
Gold
Gold initially declined during the week, attempted a rebound, but then pulled back again. Overall, the $4,600 level appears to be a key area that traders will continue to watch closely.
This level has repeatedly proven significant in the past, and that’s unlikely to change anytime soon. That said, a break below the week’s low could open the door for a move down toward the $4,200 level.
Crude Oil
Crude oil has been highly volatile again this week, with markets remaining broadly noisy and unpredictable. Prices are largely being driven by the latest headlines from the Middle East, Washington D.C., and Tehran, leaving the market heavily influenced by geopolitical developments.
Given the situation, it’s nearly impossible to analyze or predict the next move in such a chaotic environment. Over the longer term, however, the only clear takeaway is that prices are likely to maintain a higher floor than they have in the past.
GBP/USD
The British pound showed strength for most of the week, though a late pullback has raised doubts about how sustainable the rally may be.
Given enough time, the market will likely make another attempt to reach the 1.37 level, though it may take a while to get there. After all, this has been a significant level over the past several months.
Gold trades in a tight range during the Asian session, struggling to extend the prior day’s gains. It holds above $4,600 but is still set for a second consecutive weekly loss. A steadier US Dollar, supported by geopolitical tensions from stalled US–Iran talks, along with the Federal Reserve’s hawkish stance, continues to limit upside momentum.
Gold Technical Analysis
A push above $4,600 and the 100-hour Simple Moving Average (SMA) triggered some intraday short covering. However, the rally lost momentum before reaching $4,650, close to the 38.2% Fibonacci retracement of the drop from April’s peak. At the same time, the Relative Strength Index (RSI) stands at 58.33, indicating solid but not overbought conditions, while the Moving Average Convergence Divergence (MACD) remains slightly negative. Overall, momentum signals suggest that bullish pressure is present but still lacks strong conviction, even as prices stay above key short-term levels.
Given this setup, it may be wise to wait for a decisive break above the 38.2% Fibonacci level at $4,651.19 before expecting further upside from this week’s rebound off the $4,500 area, which marked a one-month low. If buyers gain traction, the next resistance could appear near the 50% retracement level at $4,696.20. On the downside, immediate support lies at the 100-hour SMA around $4,623.78. A drop below this level could open the door toward the 23.6% Fibonacci retracement at $4,595.49, with a deeper move potentially revisiting the broader swing low near $4,505.46 if selling pressure intensifies.
Fundamental Analysis
US President Donald Trump dismissed Iran’s proposal to reopen the Strait of Hormuz and ease the blockade while delaying nuclear negotiations. He stated that the US will maintain a naval blockade until Iran agrees to terms addressing concerns over its nuclear program, with reports also تشير to possible new US military strikes. These developments heighten fears of escalating tensions, supporting the US Dollar’s safe-haven appeal and weighing on Gold prices.
At the same time, the Federal Reserve kept interest rates unchanged at 3.50%–3.75%, with an unusually high level of dissent among policymakers. Recent US data showing rising inflation and continued economic strength reinforces expectations that rates could remain elevated into next year, further boosting the Dollar and pressuring Gold.
Data from the Bureau of Economic Analysis showed the PCE Price Index rose 0.7% month-on-month in March, with annual inflation accelerating to 3.5%. Core PCE also increased to 3.2% year-on-year. Additionally, the US economy grew at a 2.0% annualized pace in Q1 2026, a notable improvement from the previous quarter.
However, expectations for at least one 25-basis-point rate cut in 2026 have risen modestly, limiting bullish momentum in the Dollar and helping Gold avoid deeper losses. Market attention now turns to upcoming US data, particularly the ISM Manufacturing PMI, along with ongoing developments in the Middle East, both of which are likely to drive near-term price action.
Gold draws some buying interest on Thursday as the US dollar pauses following its post-FOMC rally. Meanwhile, elevated crude oil prices continue to stoke inflation concerns and reinforce expectations of a more hawkish Federal Reserve. At the same time, the ongoing US–Iran standoff underpins the dollar, which in turn caps further upside for the metal.
Gold (XAU/USD) extends its modest rebound from the $4,500 area—its latest monthly low—and gains traction during Thursday’s Asian session. The US dollar is currently consolidating after a hawkish Fed-driven rally to a two-and-a-half-week high, providing a supportive backdrop for the metal.
As expected, the Federal Reserve left interest rates unchanged at 3.50%–3.75%, though the decision saw the most dissent since 1992, with three officials opposing the policy tone. Fed Chair Jerome Powell later emphasized that the disagreement centered on communication rather than the need for rate hikes. Still, markets scaled back expectations for policy easing in 2026 and are now assigning a modest probability to a rate increase by year-end.
At the same time, surging energy prices—driven by ongoing US–Iran tensions and stalled negotiations—are reinforcing inflation concerns and supporting the dollar. In a recent development, President Donald Trump dismissed Iran’s proposal to end the conflict, insisting that no agreement would be reached unless Tehran abandons its nuclear ambitions. He also highlighted that naval blockades are continuing to disrupt energy flows through the Strait of Hormuz.
These factors may help sustain the dollar’s strength and limit gold’s upside potential. Even so, the precious metal has broken a three-day losing streak and is trading near $4,580, up about 0.75% on the day. Market participants now turn their attention to key US data releases, including the advance Q1 GDP report and the PCE Price Index, along with upcoming policy decisions from the Bank of England and the European Central Bank, which could drive further volatility.
Gold chart
Gold could face renewed selling pressure at higher levels, given the weakening technical outlook.
The recent rejection near the 200-period Simple Moving Average (SMA) on the 4-hour chart, combined with a drop below the 38.2% Fibonacci retracement of the March–April rally, tilts the bias in favor of XAU/USD bears.
Momentum signals also remain fragile, with the Relative Strength Index (RSI) lingering around 38 and the Moving Average Convergence Divergence (MACD) still in negative territory. This indicates that any recovery attempts may struggle as long as prices remain capped below key resistance levels.
On the downside, initial support is located near the 50% retracement around $4,494.59, followed by deeper Fibonacci support levels at $4,401.36 and $4,268.64, which could act as a broader cushion if selling pressure intensifies.
As of now, the Strait of Hormuz has effectively been shut since February 28, halting about 20% of global seaborne oil flows through this critical passage. The International Energy Agency called it “the largest supply disruption in the history of the global oil market.” Producers in the Gulf have curtailed nearly 9 million barrels per day, while U.S. gasoline prices have surged from $2.98 to above $4.00 per gallon.
Historically, shocks of this magnitude—1973, 1979, 1990—have delivered stagflationary blows severe enough to rattle markets. But after decades of observing market cycles, one lesson stands out: when price action refuses to validate a crisis narrative, it’s often because markets are factoring in dynamics that headlines overlook. That seems to be the case with Hormuz today.
Brent crude briefly spiked near $120 but has since eased to around $96, well below the $132 level projected by the Dallas Fed for a prolonged closure. Meanwhile, the S&P 500 continues to edge higher, and China—despite routing roughly a third of its crude imports through the strait—has remained resilient.
The real issue, then, isn’t why the worst-case forecasts missed the mark, but what they failed to account for—and where the true risks may now lie.
Why the Headlines Looked Worse Than the Reality
The “20% of global oil supply shut” narrative was always an oversimplification. In practice, the actual impact was cushioned by several key factors—each grounded in primary data and policy responses.
First, Gulf producers quickly rerouted a significant share of crude exports. According to estimates from Rystad Energy’s Tom Liles, around 5–6 million barrels per day could be diverted through pipeline networks in Saudi Arabia and the UAE, bypassing the Strait via outlets on the Red Sea and the Gulf of Oman. That’s roughly one-third of the region’s typical seaborne exports, reestablished within weeks rather than months.
At the same time, Iran quietly shifted from outright disruption to selective control. By late March, it allowed tankers from countries like China, Russia, India, Iraq, and Pakistan to pass. In effect, the “closure” functioned more as a rationing system than a complete blockade.
Second, strategic reserves performed exactly as intended. The International Energy Agency coordinated a record 400 million–barrel release, while the U.S. Strategic Petroleum Reserve alone contributed about 1.4 million barrels per day. As Bernstein analysts succinctly noted, the goal wasn’t to fully replace lost supply—it was to buy time. And it did just that, bridging the gap while alternative logistics ramped up and demand began to soften.
Third, China entered the الأزمة in a position of strength. Data from the U.S. Energy Information Administration showed commercial inventories approaching 1 billion barrels before February 2026, alongside an additional 360 million barrels in state reserves. That buffer equates to several months of imports, meaning Beijing had both the stockpile and the policy flexibility to weather disruptions—especially when paired with Iran’s selective transit allowances.
Taken together, these factors explain why the real-world impact fell far short of the initial shock implied by the headlines.
Finally—and most critically—the United States is structurally very different from what it was in the 1970s. Domestic crude output now exceeds 13 million barrels per day, providing a significant buffer against external supply shocks like those seen during the Arab Oil Embargo. In addition, LNG exports reached nearly 18 billion cubic feet per day in March, according to the EIA’s April Short-Term Energy Outlook. Less than 10% of U.S. crude imports pass through the Strait of Hormuz, meaning that in a global disruption, the U.S. acts more as a marginal supplier than a marginal victim.
Importantly, even the Dallas Fed’s worst-case scenario assumes the economic damage would be short-lived—limited to roughly one quarter, with an estimated 2.9 percentage point annualized drag on global real GDP. Current conditions appear much closer to the base-case outlook, which anticipated that rerouting, strategic reserves, and demand adjustments would absorb most of the shock. So far, that expectation has largely held true.
The Real Risk Lies on the Other Side
Here’s where the consensus may be misjudging the setup. If the bearish, crisis-driven oil narrative was overstated on the way in, the bullish case for oil at $96 may be equally overstated on the way out.
Once the Strait of Hormuz fully reopens, three forces are likely to hit the market simultaneously. Gulf producers could quickly bring back roughly 9 million barrels per day of shut-in supply, in line with EIA estimates. At the same time, tankers that have been sitting in storage will begin releasing cargoes, while U.S. shale—revitalized by prices near $95—continues operating at elevated output levels. Together, this creates a classic oversupply scenario.
The main counterbalance is the need to rebuild strategic reserves. More than 30 IEA member countries have drawn them down and will likely spend the latter half of 2026 replenishing stocks. Analysts at Kpler have pointed out that the back end of the oil futures curve appears undervalued, with late-2026 Brent priced around $74 compared to a fair value closer to $85.
That said, the direction may be right, but the scale could be off. Restocking demand will unfold gradually over several quarters, whereas supply can return within weeks. That mismatch is where the real risk of dislocation lies. A reasonable base case is for Brent to fall back toward the low $70s within about 90 days of a sustained ceasefire, with a meaningful chance of overshooting toward $60 if demand weakness—triggered by $4+ gasoline—persists.
This isn’t a call for a collapse in crude, but rather a recognition that the adjustment may be uneven. From current levels, upside appears limited, while the downside risk could be swift and pronounced.
The Market Has Already Pivoted to Earnings
It increasingly looks like markets have already absorbed the supply shock and moved on. Oil disruptions have been digested, and the focus has clearly shifted back to corporate earnings—and on that front, the data supports the bulls.
FactSet’s April 17 Earnings Insight shows that 88% of S&P 500 companies reporting so far have beaten first-quarter EPS expectations, well above the 10-year average of 76%. In aggregate, earnings are exceeding forecasts by 10.8%, compared to a historical norm of 7.1%. Looking ahead, analysts are now projecting around 18% earnings growth for full-year 2026. Barclays strategist Venu Krishna has already raised his 2026 EPS estimate to $321 from $305, while FactSet sees net margins reaching 13.9%—a record high. Earlier, Goldman Sachs highlighted this shift, noting that future index gains are likely to be driven primarily by earnings growth rather than multiple expansion.
Beyond that, the trend isn’t limited to 2026. Analysts are also revising 2027 earnings estimates upward, and at a pace that significantly exceeds historical norms.
That’s a genuinely constructive backdrop. Over time, equities tend to track earnings, and the strong Q1 beat rate points to real operational resilience. This isn’t a rally built on optimism alone—it’s being supported by actual results.
There are two important caveats, however.
First, forward earnings estimates almost always trend upward—until they don’t. Rising forward EPS is the norm during an expansion, not a uniquely bullish signal. What really matters is the turning point, and revisions typically roll over with a lag. As Goldman Sachs’ Ben Snider recently highlighted, much of the upward revision driving the S&P 500’s record levels has been concentrated in a narrow group of stocks, such as Exxon Mobil and Micron Technology. The median company in the index has seen minimal upgrades, suggesting this is a rally carried by a handful of leaders rather than broad-based improvement.
Second, valuations leave little room for error. The forward 12-month P/E ratio stands at 20.9—above both the 5-year average of 19.9 and the 10-year average of 18.9. At these levels, even strong earnings beats tend to generate only modest upside, while any disappointment—especially in forward guidance—can trigger sharp declines.
That makes the real test less about Q1 results and more about Q2 outlooks. If sectors like retail, travel, and discretionary begin lowering guidance as the impact of $4+ gasoline filters through consumer spending, forward estimates could finally start to roll over.
Until then, the path of least resistance for equities still appears to be upward.
How to Position From Here
I know not everyone will agree—and that’s fine. Markets exist because of differing views. But after decades of managing portfolios through shocks like this, here’s a practical way to think about positioning given the Strait of Hormuz dynamics and elevated equity valuations:
Don’t chase the oil rally. Crude right now is being driven more by geopolitics than underlying fundamentals. At around $96, the risk/reward for going long looks unfavorable. If you’re already holding energy names that have rallied 40% or more, it may make sense to lock in gains rather than press further. Adding exposure here increases downside risk if the setup reverses.
Favor infrastructure over raw exposure. Instead of betting on oil prices directly, consider energy infrastructure—midstream operators and LNG exporters. These businesses are less sensitive to spot price swings and tend to benefit from a global shift toward energy security. Their cash flows are generally more stable, even if Brent pulls back toward $70.
Respect equities—but don’t overextend. With the S&P 500 trading around 20.9x forward earnings, markets are not pricing in much room for error. It’s reasonable to acknowledge the strength, but avoid chasing it. Rebalancing—trimming outsized winners back to target weights—can help manage risk without abandoning exposure.
Hold duration as a hedge. U.S. Treasuries are currently reflecting expectations of solid growth. But if oil prices fall sharply and demand weakens, it could give the Federal Reserve room to ease policy. In that case, intermediate-duration bonds (“the belly” of the yield curve) would likely rally, providing a natural offset to risk assets.
Keep some cash on hand. Markets across equities, oil, and credit seem to be pricing in a smooth resolution to the conflict. If that assumption proves wrong—whether due to a breakdown in ceasefire or a supply glut hitting before restocking demand builds—liquidity becomes a strategic advantage. Having dry powder allows you to respond when dislocations create better entry points.
Overall, this is less about making aggressive bets and more about managing asymmetry: limited upside in crowded trades versus potentially sharper downside if the narrative shifts.
Bottom line: The market’s calm around the Strait of Hormuz is justified, and the focus on earnings is warranted. But the risk hasn’t disappeared—it has shifted. Instead of an oil price spike, the bigger threat may now be an oil downturn, and instead of geopolitics, attention turns to equity valuations. Both sides of that equation require active management, not complacency, even if markets appear steady.
With ceasefire talks postponed for the second time in a week, tensions between the U.S. and Iran over the Strait of Hormuz remain unresolved. Although equity markets have rebounded this month—shifting focus to a more optimistic macro backdrop—and crude futures have retreated from their March peaks, investors may be underestimating the tightening in physical oil supply.
At the start of 2026, an oversupply of crude was expected to weigh on prices. However, damage to energy infrastructure and production cuts in the Middle East have heightened concerns about a supply crunch triggered by disruptions in the Strait of Hormuz. Typically, about one-fifth of global oil supply flows through this passage, yet since March 1, only around 23,000 kilobarrels have exited—equivalent to less than a day and a half of normal volumes based on the previous year’s average. While earlier oversupply has cushioned the initial impact, a full market rebalancing could take several months.
Much of the attention has been on futures prices in the “paper” market, but a growing disconnect with the physical market has gone largely unnoticed since mid-March. Signs of tightening supply are evident as futures continue to trade below dated Brent—the benchmark for physical oil—even as prices recover after briefly surging past $140 per barrel ahead of the U.S.–Iran ceasefire.
As the last shipments that left the Strait of Hormuz before the conflict only reached their destinations in the week of April 13, securing physical crude supplies is quickly becoming a top priority. Japanese refiners have increased purchases of U.S. oil, Chinese buyers have pushed imports from Vancouver to record levels, and India has ramped up acquisitions of Venezuelan crude. In some cases, traders at Asian refineries have reportedly been willing to pay almost any price to secure cargoes.
While oil futures could decline once credible news emerges of a sustained reopening of the Strait, the shape of the futures curve indicates that a higher price floor may now be in place. Ongoing tightness in the physical market could drive a longer-term shift in the energy landscape—from a just-in-time supply model toward one that places greater emphasis on holding strategic inventories.
What’s Driving the Buzz Around the Petrodollar?
A major theme tied to the recent squeeze in physical oil markets is renewed speculation about the “death” of the petrodollar. Still, that narrative appears overstated. The petrodollar system—rooted in a 1970s agreement between the U.S. and Saudi Arabia to price oil in dollars and recycle those revenues into U.S. assets—remains structurally intact.
Concerns were stirred when Iran reportedly accepted transit payments in Chinese yuan, fueling talk of a potential shift toward a “petroyuan.” However, such a transition would be gradual at best, unfolding over years or even decades—not in a matter of weeks. That said, the offshore petrodollar system may be less influential in the current shock compared to past cycles.
Several factors explain this shift. Gulf nations have increasingly diversified away from traditional reserve assets like U.S. Treasuries, favoring sovereign wealth funds and equity investments instead. Saudi Arabia, for example, has begun issuing dollar-denominated bonds rather than simply reinvesting in them. Additionally, the temporary decline in Middle Eastern oil flows due to disruptions in the Strait of Hormuz has reduced the scale of dollar recycling tied to energy exports.
At the same time, the U.S.’s position as a net energy exporter helps sustain strong dollar liquidity within North American oil markets, reinforcing the broader role of the dollar in global energy trade.
What About Equities?
As global markets have shown since late February, rising oil prices don’t impact all regions equally. The U.S., now firmly a net exporter of petroleum products, enjoys a degree of insulation. This status helps shield domestic equities, which also tend to rely less on overseas revenue than many international peers—reducing vulnerability to global spillovers.
In contrast, developed markets outside the U.S. appear more exposed. Europe’s relative underperformance during the conflict highlights how higher energy and raw material costs can squeeze corporate margins and cap earnings growth. At the same time, rising oil prices often translate into “imported” inflation, pushing expectations higher for rate hikes from central banks like the European Central Bank and the Bank of England this summer. Even if markets treat the shock as temporary, tighter monetary policy could weigh on European equities in the near term.
Japan is particularly sensitive, with roughly 88% of its oil imports coming from the Middle East. Still, Japanese stocks have shown some resilience, supported by a rebound in technology shares. A similar pattern is visible across emerging Asia: markets with strong tech sectors, such as South Korea and Taiwan, have held up better, while countries like Thailand and Indonesia—less driven by tech—have been more negatively affected by rising oil prices and supply constraints.
Conclusion
This unprecedented shock to global energy supply is something investors should keep a close eye on. Current market signals point to oil prices staying elevated, while tightness in the physical market could persist as supply takes time to normalize—potentially marking a more structural shift in how energy markets operate.
That said, the situation does not appear catastrophic for either the U.S. dollar or global equities. The dollar index has actually strengthened since the conflict began, reinforcing its role as the world’s primary reserve currency. Similarly, concerns about the collapse of the petrodollar system seem exaggerated.
With both Washington and Tehran signaling a willingness to maintain the temporary ceasefire and continue negotiations over the Strait of Hormuz, equity markets are likely to shift their focus back to underlying fundamentals. The disruption from the effective closure of the waterway may remain a background factor rather than a dominant driver.
In the near term, U.S. equities are expected to outperform both developed and emerging markets, as strong earnings—particularly from the technology sector—should more than offset the relatively limited drag from higher oil prices.
The “rising oil pushes the Fed toward rate hikes, so gold has to drop” narrative is circulating—it holds up… until it doesn’t.
At certain oil and inflation levels, people start rushing into gold, but those tipping points remain unclear for now.
As long as that (misguided) narrative persists, declining oil prices tend to support gold.
The chart shows a clear head-and-shoulders top formation, though there’s no certainty it will unfold exactly as the technical setup suggests.
The “scenario #2” outlook for oil comes down to one key takeaway: whether the move happens now or later, oil is highly likely headed much higher.
While Americans face less immediate risk of fuel shortages than those in Asia or Europe, global pricing means they’re still exposed to similar inflation pressures—just with a delay.
Because the oil–gold–interest rate narrative heavily influences bank algorithms and institutional capital, disciplined gold investors should maintain enough liquidity to stay composed during the sharp pullbacks this narrative can trigger in gold, silver, and mining equities.
Gold may ultimately reach $20,000, but the path won’t be linear. Price corrections can bring equally sharp emotional swings—especially for investors whose exposure is misaligned with their true risk tolerance.
Over the past couple of weeks, I’ve argued that the bears have the upper hand on the daily chart.
Four short-term technical factors are driving this view. First, the RSI has struggled to break decisively above the 50 level. Second, strong resistance remains around $4,900.
Third, the key 14,7,7 Stochastics oscillator has flashed a sell signal and hasn’t yet reached oversold territory. Finally, the 20,40,10 MACD is showing weakness—the recent buy signal barely pushed the histogram above zero and has since faded significantly.
As for tactics, the approach is straightforward: look to accumulate in the $4,100 and $3,900 zones (or both) if the current pullback reaches those levels. On the upside, consider trimming positions modestly in the $5,400–$5,600 range.
As U.S. debt pressures deepen and reliance on fiat intensifies, more countries and institutions may continue reducing their bond exposure. In that environment, new narratives will likely emerge arguing for lower gold prices. For gold investors, fiat acts as a buffer.
Gold serves as money, while fiat provides the flexibility to navigate shifting narratives and the short- to medium-term volatility they can create in gold, silver, and mining stocks.
Here’s a clean paraphrase:
A look at the key weekly chart for gold shows a much stronger setup than the daily timeframe, and weekly signals typically carry greater weight for forecasting price direction.
The 14,5,5 Stochastics oscillator is currently flashing a buy signal, while a large, flag-like consolidation pattern is forming—resembling a drifting bullish rectangle.
The tactical approach remains unchanged from the daily view: consider buying in the $4,100 and $3,900 zones, and look to take profits in the $5,400–$5,600 range.
What about the miners? Looking at the long-term CDNX chart, I had anticipated a multi-month consolidation as the index approached the neckline of its massive inverse head-and-shoulders pattern—and that scenario is now unfolding.
Turning to the senior miners through the GDX ETF, the picture suggests patience is still needed. The Stochastics oscillator hasn’t yet reached oversold territory, indicating there may be further downside or consolidation before a stronger entry point emerges.
The preferred buy zones for senior gold miners mirror those for gold itself—around $4,100 and $3,900.
As emphasized, gold represents money, while fiat serves as insurance. Investors in gold equities should maintain sufficient cash reserves to confidently accumulate their preferred miners at these levels, while viewing the $5,400–$5,600 range as an opportunity to lock in substantial gains and step back from the market during what remains a broader gold bull cycle.
WTI advances as the Strait of Hormuz remains mostly closed, constraining Middle East supply. Oil’s upside could be limited as markets evaluate ceasefire chances and a possible reopening following Iran’s latest proposal to the US. Meanwhile, six Iranian tankers have been turned back under the US blockade, while an ADNOC LNG vessel has passed through Hormuz and is approaching India.
West Texas Intermediate (WTI) crude extends its advance for a second straight day, trading near $95.20 per barrel during Tuesday’s Asian session. Prices are being supported as the Strait of Hormuz remains largely closed, tightening energy supplies from the Middle East.
Still, further upside may be limited as investors assess the chances of a durable ceasefire and a possible reopening of the waterway following Iran’s latest proposal to the United States. Tehran has reportedly conveyed via Pakistan that it could de-escalate if Washington lifts its naval blockade, adjusts transit rules through Hormuz, and provides assurances against future military action.
A US official said Monday that President Donald Trump is not satisfied with the proposal, while Iranian sources indicated that Tehran is holding off on addressing its nuclear program until hostilities end and shipping disputes in the Gulf are resolved.
Now in its ninth week, the conflict has driven energy prices higher and disrupted key supply chains, with the International Energy Agency (IEA) warning of a potential supply shock alongside slowing demand risks.
The standoff remains unresolved, with Iran restricting flows through the Strait—responsible for roughly 20% of global oil and gas transit—while the US continues its blockade of Iranian ports.
Ship-tracking data cited by Reuters highlights the disruption, showing six Iranian tankers forced to turn back amid the blockade. However, an LNG vessel operated by ADNOC has managed to pass through the Strait of Hormuz and is reportedly approaching India.
Silver ticks up as safe-haven demand strengthens amid stalled U.S.–Iran negotiations.
President Donald Trump canceled a planned diplomatic visit to Pakistan that could have enabled direct talks with Iran.
Meanwhile, the Federal Reserve is expected to proceed cautiously, with gradual rate cuts anticipated under incoming Chair Kevin Warsh.
Silver (XAG/USD) extends its gains for a second straight session, hovering near $76.00 per troy ounce during Monday’s Asian trading hours. The metal is being supported by rising safe-haven demand as US–Iran peace negotiations remain at an impasse.
Donald Trump canceled a planned delegation to Pakistan that could have facilitated direct discussions with Iran. Over the weekend, he instructed Jared Kushner and Steve Witkoff to skip the trip, noting that Iran had “offered a lot, but not enough.” Trump added that Iran could initiate talks directly, emphasizing the availability of secure communication channels.
On the other side, Masoud Pezeshkian reiterated that Iran would not engage in negotiations imposed under pressure or threats.
Meanwhile, shipping activity through a key strategic waterway remains heavily constrained due to Iran’s control and a US naval blockade, raising concerns about prolonged disruptions and lending support to crude oil prices.
Elevated energy costs are fueling inflation worries and reinforcing a more hawkish outlook among central banks, which may cap further gains in non-yielding assets like silver.
At the same time, the Federal Reserve is expected to remain cautious, with markets pricing in gradual rate cuts under incoming Chair Kevin Warsh. The Fed is widely anticipated to hold rates steady at its April meeting, while investors will closely monitor the post-meeting press conference for insights into how policymakers assess rising energy prices and their implications for the longer-term interest rate path.
Silver prices dropped sharply this week as interest rates remained the key driver. Ongoing uncertainty around Middle East tensions—despite some easing—continues to leave traders unsure, with no clear agreement yet between the U.S. and Iran.
The $80 level is acting as resistance; a break above it could push prices toward $90, while $70 appears to be the support floor.
Gold
Gold prices have fluctuated throughout the week, with the region just above $4,600 emerging as a key level. Similar to silver, the market has shown strong sensitivity to interest rate movements. In particular, the U.S. 10-year yield remains crucial, with the 4.30% mark acting as an important threshold. Generally, when yields rise above 4.3%, it tends to put downward pressure on gold.
EUR/USD
The euro moved erratically throughout the week, briefly testing the 1.18 level before finishing slightly lower. Overall, it remains near the upper boundary of the range it has traded in since around this time last year, so no major breakout is expected
That said, interest rates in both the United States and Germany are elevated beyond where they arguably should be, and combined with ongoing war-related news, they are creating significant market distortions. Even so, it’s notable that prices have remained within the same range for an extended period, and as we approach the upper boundary, selling pressure is beginning to re-emerge.
GBP/USD
The British pound traded within a relatively narrow range over the week, as traders weighed the potential end of the war and its implications for interest rates.
The 1.35 level stands out as a key area—not only as a major psychological round number, but also as a point many market participants are watching closely. Overall, the market appears to be searching for direction.
A break above last week’s high could open the door for a move toward the 1.3750 level. On the other hand, if the market pulls back, the 1.3350 area may become a likely target for sellers.
USD/MXN
The US dollar traded choppily against the Mexican peso during the week, testing the 17.5 level.
This zone has previously acted as both support and resistance, suggesting strong market memory. A break above 17.50 could pave the way for a move toward the 17.8 level.
A pullback from this point would likely signal continued consolidation for the US dollar between the 17 and 17.5 levels. While the interest rate differential still favors Mexico, any increase in risk aversion could boost demand for the dollar.
NASDAQ 100
The Nasdaq 100 posted another strong rally over the week, marking its fourth consecutive week of significant gains. Short-term pullbacks could present buying opportunities, especially on a bounce, for those looking to align with the upward momentum. The 26,250 level, which previously acted as resistance, is likely to serve as support if the market pulls back from here.
It’s worth noting that much of the Nasdaq 100’s movement is being driven by developments in artificial intelligence, along with ongoing headlines out of the Middle East.
BTC/USD
Bitcoin moved higher over the week, though it still faces some downward pressure. The climb appears to be gradual, with the market likely aiming toward the $84,000 level—an area that previously acted as support and may now serve as resistance.
USD/CAD
The $72,000 level remains a key area on pullbacks, where buyers may step back in and provide support to push the market higher.
The US dollar initially declined against the Canadian dollar but found support at the 200-week EMA, reversing course and forming a hammer pattern.
A break above the 1.37 level could open the way for a move toward 1.38. The interest rate differential continues to favor the US dollar, which should remain a key driver of direction.
Gold edged lower from around $4,750 in Thursday’s Asian session, giving back part of the previous day’s gains as renewed US–Iran tensions over the Strait of Hormuz kept the US Dollar supported and weighed on sentiment. However, expectations that the Federal Reserve may hold off on further rate hikes continued to limit downside pressure on the non-yielding metal.
Technical Analysis
Technically, XAU/USD shows a mildly bearish short-term bias as it remains below the 100-period SMA at $4,739.32, the 200-period SMA at $4,770.64, and the 20-period SMA at $4,776.89. The RSI, hovering near 44, points slightly lower, while the Momentum indicator also trends modestly below the midline, signaling weakening upside traction.
On the upside, immediate resistance is seen at the 100-period SMA, followed by stronger hurdles at the 200-period SMA and the 20-period SMA, creating a dense resistance cluster that bulls need to clear to neutralize bearish pressure. With limited nearby support from indicators, a further decline could expose gold to retesting recent lows around $4,668 if selling pressure intensifies.
On the daily timeframe, however, the broader outlook remains more constructive. Price continues to hold above the 20-day SMA at $4,693.12 and the 100-day SMA at $4,731.60, which acts as a key near-term support area. The much lower 200-day SMA at $4,236.91 underscores the longer-term uptrend. Meanwhile, the RSI near 48 and neutral Momentum readings suggest consolidation, with bullish momentum cooling rather than reversing decisively.
Fundamental Analysis
Spot Gold was little changed on the day, hovering near the $4,730 level as markets grappled with rising uncertainty stemming from fresh Middle East tensions that have pushed the situation into a stalemate.
After a series of back-and-forth developments, the United States and Iran failed to restart negotiations and missed the scheduled meeting in Pakistan. US President Donald Trump later said the ceasefire would remain in place until Iran presents a “unified proposal,” while Tehran dismissed the extension as “meaningless” and warned of a potential military response.
Meanwhile, tensions escalated around the Strait of Hormuz, with reports suggesting renewed disruptions to shipping routes, including vessel seizures and attacks on oil transport. Midweek, Trump indicated that talks with Iran could still take place next Friday, though Iranian media quickly denied any such plans, stating there were no current intentions to negotiate with Washington.
With both the ceasefire and diplomatic prospects in doubt, markets remain directionless, further complicated by anticipation of key central bank meetings next week.
In this environment, crude oil has strengthened notably, with West Texas Intermediate (WTI) climbing to around $92 per barrel, its highest level since last Friday. The rally reflects growing concerns over supply risks and skepticism that a swift resolution in the Middle East is forthcoming.
WTI extends its rally for a third consecutive session, climbing to its highest level in nearly two weeks.
Persistent risks around the Strait of Hormuz offset the impact of the extended US-Iran ceasefire, lending support to oil prices.
Overall, the underlying fundamentals remain supportive of the bullish outlook, suggesting further upside potential.
WTI crude briefly surged to the $95.80–$95.85 region during the Asian session—its highest level in about a week and a half—before losing momentum and pulling back toward the lower end of the daily range. It currently trades just above $92.00, still holding modest gains of around 0.30% on the day.
Although the US-Iran ceasefire has been temporarily extended, markets remain doubtful about any lasting easing of tensions given the lack of meaningful progress in negotiations. Ongoing clashes around the Strait of Hormuz continue to raise concerns about potential supply disruptions, keeping a geopolitical risk premium embedded in oil prices and supporting a third consecutive day of gains.
Further underpinning the market, US President Donald Trump confirmed that the naval blockade of Iranian ports will remain in place. At the same time, Iran’s Tasnim news agency reported that Revolutionary Guard naval forces seized two vessels and that multiple container ships came under fire in the Strait. Coupled with an unexpected drop in US crude inventories, these developments add to the bullish tone.
That said, the latest upward spike was partly driven by unverified reports of an attack on Tehran, and the rally quickly lost steam once no concrete news followed. This calls for some caution among bullish traders, even though the broader fundamental backdrop still points to a bias for further upside in crude prices.
Heightened geopolitical risks are weighing on gold’s short-term outlook.
Movements in oil, bond yields, and the US dollar continue to drive price action.
However, a decisive break above resistance could reignite bullish momentum.
Gold started the week under pressure, opening with a gap lower before gradually recovering toward Friday’s close. Recent developments in the Middle East have slightly shifted the near-term outlook, with risks now leaning modestly to the downside. The main concern is clear: a sharper increase in oil prices could strengthen the US dollar and lift bond yields—both factors that typically act as headwinds for gold.
So far, the rise in oil has been relatively moderate, with Brent crude up about 5% and trading near $95 per barrel. Even so, the broader environment remains fragile. The US seizure of an Iranian-flagged vessel near the Strait of Hormuz has drawn strong warnings from Tehran, including threats of retaliation and the potential for further disruption to already strained negotiations. With a two-week ceasefire set to expire on Wednesday and little tangible progress achieved, uncertainty continues to weigh on the situation. Iran has also reversed its brief reopening of the strait, accusing the US of failing to uphold its commitments while maintaining pressure on Iranian ports.
Before diving deeper into the macro drivers, let’s first take a look at gold’s chart…
Gold Technical Analysis
As the chart illustrates, gold is currently testing a key resistance zone in the $4,800–$4,850 range. This area is significant, as it combines multiple technical factors: previous support and resistance levels, the underside of a broken upward trendline, and the 61.8% Fibonacci retracement level.
Since early April, prices have repeatedly tested this resistance zone without achieving a clear breakout. However, the lack of strong selling pressure is telling. When resistance is tested multiple times without a significant pullback, it often signals underlying strength—raising the probability of an eventual upside break, though confirmation is still needed.
A daily close above $4,850 would serve as that confirmation, indicating a bullish reversal and paving the way for further upside. In that case, the next focus would be the $5,000 level, which aligns with the 78.6% Fibonacci retracement and also stands out as a key psychological milestone.
On the downside, initial support is seen near $4,750, followed by $4,600 and then $4,500. The most critical level, however, is $4,400. This zone has demonstrated its significance before—acting as support in early February and quickly being reclaimed after a brief breakdown in late March.
As long as $4,400 holds, the broader bullish structure remains intact, even if short-term conditions appear somewhat uncertain.
Can Gold Still Find Its Footing?
Despite increasingly heated rhetoric, there are still tentative signs that diplomacy hasn’t been fully abandoned. Donald Trump has struck a cautiously optimistic tone about the prospects for a deal, even while warning that military action targeting Iranian civilian infrastructure remains an option if talks break down.
On the other side, Iran continues to stand firm. The removal of restrictions around the Strait of Hormuz remains a key precondition for meaningful engagement, while officials emphasize that major sticking points—especially around nuclear issues—are still unresolved. Even so, financial markets have so far absorbed these developments without major disruption.
Behind the scenes, quieter diplomatic efforts appear to be ongoing. Asim Munir has reportedly engaged with Trump, underscoring that the Hormuz situation remains a central obstacle. There are indications that this view has been acknowledged, though it’s unclear whether it will lead to concrete progress.
If negotiations resume and produce a breakthrough, improved risk sentiment could support gold and potentially drive it toward the $5,000 level. If not, investors should be prepared for a more volatile and uneven trajectory ahead.
A Waiting Game for Now
For the time being, gold’s outlook remains finely poised. Much depends on the direction of bond yields and the US dollar—both of which are closely linked to inflation expectations and, importantly, movements in oil prices. In that context, ongoing developments in the Middle East continue to be the primary catalyst.
For now, a patient approach appears to be the most sensible course.
The latest decline in gold and silver has taken investors by surprise again, but for reasons quite different from the late-February correction. While that earlier drop was largely the result of positioning and technical factors, the current weakness is unfolding amid escalating geopolitical tensions and tighter financial conditions. Despite these differences, both episodes underscore how sensitive precious metals are to changes in interest rates, the US dollar, and overall liquidity. Here are five key takeaways shaping the current market move:
Macro Forces Are Now in Control
Unlike the February selloff, which stemmed mainly from position unwinding, this decline is being driven by broader macro dynamics. Rising tensions between the US and Iran have pushed oil prices higher, lifting inflation expectations and prompting markets to reassess the outlook for interest rates. As yields climb and the dollar strengthens, gold faces pressure as a non-yielding, dollar-priced asset. This marks a fundamentally driven shift rather than a technical correction.
The Dollar Is Overtaking Gold’s Safe-Haven Role
Although geopolitical risks typically support gold, the US dollar has emerged as the preferred safe haven this time. Instead of flowing into gold, capital is rotating into dollar-denominated assets as financial conditions tighten. This has created an unusual scenario where risk aversion rises even as gold prices fall, with the dollar absorbing most of the defensive demand.
Real Yields Remain the Critical Channel
Real yields have played a central role in both downturns. In February, a mild adjustment in rate-cut expectations weighed on gold. Now, higher energy prices are pushing up inflation expectations while reducing the likelihood of near-term rate cuts, keeping real yields elevated. This continues to exert downward pressure on precious metals.
Silver Is Amplifying Market Moves
Silver’s steeper drop highlights its higher volatility and dual identity as both a precious and industrial metal. Previously impacted by speculative positioning, it is now also facing concerns about slowing global growth as rising energy costs threaten demand. This combination makes silver more vulnerable and prone to larger swings than gold.
Stability Hinges on Multiple Uncertain Factors
The outlook for gold and silver remains unclear. While February’s stabilization depended on positioning resetting, the current trajectory will be shaped by a more complex mix of factors: the persistence of the energy shock, the Federal Reserve’s response, and the direction of the US dollar. A de-escalation in geopolitical tensions could spark a quick rebound, but if inflation stays elevated and delays rate cuts, precious metals may continue to face headwinds in the near term.
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Gold prices climbed during Asian trading on Wednesday, rebounding from a one-week low after the U.S. extended its ceasefire with Iran indefinitely, though uncertainty around future peace negotiations persisted.
The precious metal had come under pressure in the previous session after Federal Reserve Chair nominee Kevin Warsh indicated he had not assured President Donald Trump of any interest rate cuts if confirmed.
Spot gold gained 0.9% to $4,763.66 per ounce, while gold futures advanced 1.3% to $4,782.21/oz as of 02:45 ET (06:45 GMT). Prices continued to trade within the $4,700–$4,900 range observed over the past two weeks.
Other precious metals also posted gains, with spot silver rising 2.4% to $78.5335/oz and spot platinum increasing 2.3% to $2,087.15/oz.
On Tuesday, Donald Trump announced an indefinite extension of the ceasefire with Iran, opening the door for further negotiations between Washington and Tehran.
Despite the extension offering some near-term relief, the outlook for future peace talks remains unclear. Expected discussions between the U.S. and Iran, which were slated for Tuesday, collapsed at the last minute.
Trump also stated that a naval blockade against Iran would stay in place, prompting backlash from Iranian officials, who described the move as an “act of war.”
Gold has faced difficulties since the conflict began, as safe-haven demand has been outweighed by concerns over the war’s potential to drive inflation.
Since the outbreak of the conflict in late February, the metal has traded more like a risk-sensitive asset, often moving in line with equities as market sentiment shifts with developments in the situation.
Warsh signals no pledge on rate cuts, hints at major Fed policy changes
Precious metals came under pressure on Tuesday as the U.S. dollar strengthened, supported by market reaction to testimony from Kevin Warsh.
Warsh stressed the importance of the Federal Reserve’s independence from political influence, while also pointing to the possibility of a significant policy overhaul at the central bank if he is confirmed as chair.
A former Fed governor, Warsh is viewed as less dovish than markets had anticipated. His nomination in late January had already sparked sharp declines in gold and other precious metals.
Although his confirmation appears likely, the timeline remains uncertain. Several Republican leaders have opposed moving forward with Warsh’s appointment until the Trump administration ends its ongoing probe into current Fed Chair Jerome Powell.
As a result, Powell is expected to remain in his role beyond the scheduled end of his term on May 15, particularly if Congress delays Warsh’s confirmation.
Gold comes under renewed selling pressure in the Asian session, though losses appear contained.
Persistent inflation concerns keep U.S. bond yields elevated, supporting the dollar and pressuring the metal.
However, growing expectations of Federal Reserve rate cuts may limit further dollar strength and help support the non-yielding gold.
Gold (XAU/USD) remains under pressure and trades below the $4,800 level in the early European session on Tuesday, though it stays above the one-week low touched a day earlier. Market participants remain doubtful about a potential US–Iran deal as tensions persist around the Strait of Hormuz. The US Navy’s seizure of an Iranian-flagged cargo vessel in the Gulf of Oman, followed by Iran’s renewed closure of the key shipping route, has supported crude oil prices. This, in turn, has reignited inflation concerns, boosted the US dollar, and weighed on gold.
That said, stronger gains in the dollar appear limited as expectations for further rate hikes by the Federal Reserve continue to fade. According to the CME Group’s FedWatch Tool, markets are now pricing in roughly a 45–50% chance of a rate cut by year-end, which could cap USD strength and provide underlying support for non-yielding gold. Meanwhile, traders are likely to remain cautious amid uncertainty over whether US–Iran peace talks will materialize, making it wise to wait for clear follow-through selling before expecting deeper losses in XAU/USD.
US President Donald Trump stated that American negotiators will travel to Pakistan for another round of discussions with Iran in an effort to extend a fragile ceasefire set to expire on Wednesday. However, Iranian officials remain reluctant to engage in talks under current conditions, citing the ongoing US blockade. Parliament Speaker Mohammad Bagher Ghalibaf emphasized that Iran will not negotiate under pressure, while Foreign Minister Abbas Araghchi pointed to continued US ceasefire violations as a key obstacle to diplomacy. Despite this, reports indicate that an Iranian delegation may still head to Islamabad for negotiations.
Going forward, markets will stay highly sensitive to developments in the US–Iran situation, which could drive volatility across asset classes. In addition, traders will look to testimony from Fed Chairman-designate Kevin Warsh for further direction. Given the mixed fundamental backdrop, caution remains warranted before taking strong directional positions in gold.
Gold (XAU/USD) – 4-hour timeframe chart
The bullish outlook for gold remains intact as long as price stays above the 200-period EMA and the 50% Fibonacci retracement, a zone that now acts as a confluence support after previously serving as resistance.
The metal continues to show a constructive short-term tone, holding above the 200 EMA at $4,784.25. Just below, the 50% retracement of the March decline at $4,762.13 reinforces this support area, suggesting underlying buying interest. However, momentum indicators are relatively neutral rather than strongly trending—RSI is hovering around 51, while MACD remains slightly in negative territory—indicating that although bulls are still in control structurally, upside momentum is not particularly strong at the moment.
In terms of levels, immediate support lies at the 200 EMA ($4,784.25), followed by the 50% retracement at $4,762.13. A decisive break below this zone could open the door to deeper Fibonacci support levels at $4,607.05 and $4,415.17, with the broader downside target near $4,105.01. On the upside, resistance begins at the 61.8% retracement level at $4,917.21, with further barriers at $5,138.01 (78.6%) and the cycle high around $5,419.25, where rejection could potentially limit further gains in the current bullish phase.
Oil prices dropped by more than $1 on Tuesday, giving back the previous session’s gains, as expectations grew that U.S.–Iran peace talks this week could ease tensions and allow more crude supply from the Middle East.
Brent crude fell $1.04 (1.1%) to $94.44 per barrel by 0600 GMT. U.S. West Texas Intermediate (WTI) for May declined $1.66 (1.9%) to $87.95, with the contract expiring Tuesday, while the more active June contract slipped $1.24 (1.4%) to $86.18.
This pullback followed a sharp rally on Monday, when Brent jumped 5.6% and WTI surged 6.9% after Iran closed the Strait of Hormuz again and the U.S. seized an Iranian cargo vessel as part of its blockade.
Despite ongoing risks, market sentiment is being driven by optimism that negotiations could extend the current ceasefire or even produce a broader agreement, though disruptions to supply remain a concern.
ING analysts noted that while prices spiked after the Strait of Hormuz closure, trading patterns still reflect confidence in diplomatic progress, warning that markets may be underestimating the scale of supply disruptions.
Iran is considering joining peace talks in Pakistan, according to a senior official, as Islamabad works to mediate and end the U.S. blockade. However, the blockade continues to complicate Tehran’s participation, especially with the current two-week ceasefire nearing its expiry.
Citi analysts expect a memorandum of understanding or a ceasefire extension this week, potentially leading to a wider deal, but caution that prolonged disruptions remain possible if negotiations fail.
Uncertainty persists, as Iranian officials emphasized no final decision has been made. Foreign Minister Abbas Araqchi cited ongoing U.S. ceasefire violations as a barrier, while Parliament Speaker Mohammad Baqer Qalibaf reiterated that Iran will not negotiate under pressure.
Meanwhile, shipping through the Strait of Hormuz—responsible for roughly 20% of global oil flows—remained constrained. Citi estimates that if disruptions last another month, losses could reach 1.3 billion barrels, pushing prices toward $110 per barrel in Q2 2026.
Kuwait has declared force majeure on oil exports due to the blockade, while higher prices have already reduced global demand by about 3%, according to Societe Generale. The bank warned that risks skew toward greater losses the longer supply disruptions persist, with full normalization unlikely before late 2026.
One by one, quietly and without public notice, central banks around the world are repatriating their gold reserves. From New Delhi to Belgrade, Frankfurt to Paris, institutions are arriving at similar conclusions independently. The trust that once supported the postwar reserve architecture is beginning to show visible cracks.
Introduction
The last time France withdrew its gold from American custody was in 1965. Under Charles de Gaulle, who viewed the Bretton Woods system as granting the United States an “exorbitant privilege,” France dispatched a warship to New York to exchange dollars for gold—directly challenging US monetary supremacy.
Six years later, President Richard Nixon ended the dollar’s convertibility into gold, effectively dismantling the Bretton Woods gold standard. Six decades on, France has again quietly reduced its gold holdings stored at the New York Federal Reserve. This time, instead of geopolitical confrontation, the move is executed through discreet financial transfers, driven by a €12.8 billion arbitrage opportunity.
Despite the change in method, the underlying motivation appears familiar: persistent skepticism toward dollar-centric financial systems and a renewed emphasis on monetary sovereignty. While history does not repeat exactly, developments in gold markets often echo earlier patterns with notable precision.
The Silent Return
For much of the postwar period, the physical location of gold reserves was rarely questioned. Many central banks—particularly in Europe and the developing world—kept their gold in custodial vaults such as the Federal Reserve Bank of New York and the Bank of England, assuming these locations were neutral, liquid, and politically secure. That long-standing assumption is now weakening.
Recent data supports this shift. The World Gold Council’s Central Bank Gold Reserves Survey 2025, based on responses from 73 institutions, shows that 59% of central banks now store at least part of their gold domestically, up from 41% in 2024 and 50% in 2020. Since 1972, approximately 6,900 tonnes of gold have been repatriated to national vaults.
This marks an 18-percentage-point increase in just five years, with most of the change occurring in the past year alone. The same survey also found that 95% of central banks expect global gold reserves to rise further over the next 12 months, indicating a broadly shared expectation of continued accumulation among monetary authorities.
The driver behind this shift is increasingly evident. The 2022 freezing of around $300 billion in Russian foreign currency reserves sent a powerful message: assets held abroad may not remain fully under the owner’s control in times of geopolitical stress. An updated 2025 Invesco survey of central banks shows that the share storing gold domestically has increased by 18 percentage points since that episode—suggesting a striking alignment between the event and changing reserve behavior.
Gold has traditionally been regarded as the ultimate safe-haven asset, but recent developments revealed a less discussed vulnerability: what was once framed as market risk has increasingly become jurisdictional and counterparty risk. In other words, even physical reserves held in trusted foreign vaults depend on political continuity and legal access—risks that were previously underappreciated.
The reaction has been broad-based and measured in substantial volumes. Bloomberg reports that India has repatriated roughly 280 tonnes of gold over the past four years, including a notable transfer from the Bank of England in 2024. In July 2025, it was also reported that Serbia brought back its entire gold holdings—worth about $6 billion—into domestic storage, deliberately avoiding reliance on established international custodial centers.
Other countries, including Poland, Turkey, and Nigeria, have followed similar paths. While much of this movement has been led by emerging markets, the trend is gradually extending into parts of Western Europe as well, pointing to a broader structural rethinking of where ultimate financial security resides.
The pace of accumulation further strengthens this trend. According to World Gold Council data, central banks purchased more than 1,000 tonnes of gold annually in 2022, 2023, and 2024—an unprecedented sustained buying cycle in modern history. Although this pace eased to 863 tonnes in 2025, it still remained exceptionally high by historical standards.
By early 2026, total gold held by central banks worldwide was estimated at around $4 trillion, overtaking, for the first time, the roughly $3.9 trillion in US Treasury securities held by the same institutions. According to the World Gold Council and Visual Capitalist, this shift reflects a meaningful rebalancing of global reserve preferences, with potential long-term implications for the international monetary system.
France’s Banque de France offers a particularly illustrative case. Between July 2025 and January 2026, it carried out a discreet program involving 129 tonnes of gold stored at the New York Federal Reserve—about 5% of its total 2,437-tonne holdings—executed through 26 separate transactions. However, this was not a straightforward physical repatriation.
Instead of transporting older bars across the Atlantic, the central bank sold legacy-format gold in New York and replaced it with modern London Good Delivery bars held in Paris. The result was effectively a swap in form rather than a logistical relocation.
As reported by La Tribune, the financial outcome was striking: a combined €12.8 billion gain—€11 billion in 2025 and €1.8 billion in 2026—achieved without physically moving the metal. While often described in the press as repatriation, the operation was more accurately a form of quality arbitrage that incidentally increased domestic holdings.
The End of the American Vault Illusion
Germany’s case underscores the strategic significance of this shift more clearly than France’s quieter financial maneuvers. The Bundesbank continues to hold 1,236 tonnes of gold at the Federal Reserve Bank of New York—around 36.6% of its total 3,378-tonne reserves—and this remains the largest single foreign gold position stored at the NY Fed.
Between 2013 and 2017, Germany conducted the largest gold repatriation operation in modern history, withdrawing 674 tonnes from both New York and Paris. This process was framed at the time as a technical modernization of reserve management rather than a strategic pivot.
For context, the New York Federal Reserve currently stores roughly 6,331 tonnes of foreign sovereign gold. Germany alone accounts for nearly one-fifth of all foreign-held gold in its vaults in lower Manhattan, highlighting how concentrated global trust once was in a single custodial hub.
From 2013 to 2021, Germany repatriated about 300 tonnes from New York and 283 tonnes from Paris, completing what was widely regarded as a normalization of storage practices. The remaining 1,236 tonnes were, at the time, still considered securely and appropriately held abroad.
What has changed since then is not necessarily the security of the vault itself, but the perception of what “secure custody” means in a more fragmented geopolitical environment.
This ruling is increasingly subject to political debate. In January 2026, former senior Bundesbank official Emanuel Mönch warned that, amid heightened geopolitical uncertainty, concentrating large volumes of gold in the United States poses risks. He argued that the Bundesbank should consider further repatriation as a way to enhance strategic autonomy. His position echoes a widening political consensus in Germany, spanning parties from the AfD to figures within the Greens and FDP.
Despite this, the Bundesbank has not changed its official policy. It continues to regard New York as a safe and dependable storage hub, and no additional repatriation initiative is currently planned. Nevertheless, the divergence between institutional continuity and mounting political pressure is becoming more pronounced.
At a deeper level, the issue is structural. For many years, the rationale for keeping gold in New York rested on three foundations: liquidity, given the ability to quickly trade or mobilize gold in the world’s largest market; network advantages, driven by the scale and efficiency of the LBMA and New York Federal Reserve gold markets; and political confidence, based on the assumption that US custody would not be used as a geopolitical lever.
Each of these pillars has since been weakened to some extent. The 2022 sanctions episode demonstrated that the US and its allies are willing to deploy financial infrastructure as an instrument of geopolitical pressure. A more transactional approach in US foreign policy has further reinforced such concerns. At the same time, improvements in European gold markets and LBMA access have reduced the liquidity advantages of storing reserves in New York, making domestic storage increasingly viable without significant market disadvantage.
The Overlooked Gold Catalyst Markets Still Haven’t Factored In
Investment banks are largely aligned on a continued rise in gold prices, though their forecasts differ, reflecting varying views on how quickly central bank behavior is shifting.
Goldman Sachs has lifted its 2026–2027 outlook to $4,000–$5,400, pointing to sustained demand from emerging-market central banks. J.P. Morgan Private Bank is even more bullish, projecting $6,000–$6,300, attributing the upside to accelerating diversification away from the US dollar. UBS takes a more moderate stance at around $4,200, but similarly highlights a global trend of reducing dollar exposure.
Taken together, the wide forecast range of roughly $3,100 to $6,300 is less a sign of disagreement about direction and more about uncertainty over timing—particularly the speed of gold repatriation and reserve reallocation. The common thread across all projections is a shared conviction in a longer-term bullish trend, driven by evolving central bank strategies. Early 2026 pricing behavior already appears to be reinforcing this growing institutional confidence in gold.
Gold repatriation does not change the total global supply; it simply reallocates where and how gold is held and accessed. For example, when the Banque de France substituted New York-held ingots with London Good Delivery bars in Paris, global central bank reserves remained unchanged, with only a shift in classification and location. The London Bullion Market Association (LBMA), which clears roughly $30 billion in gold transactions daily, operates on the assumption that institutional gold is readily accessible regardless of storage location.
As the pool of immediately available gold tightens, borrowing costs tend to increase, price spreads widen, and physical gold can trade at a premium to paper claims. This reflects a scarcity of deliverable metal that is not captured in conventional supply-flow data and is often underrepresented in market models—highlighting that distribution can matter as much as total stock.
If Germany were to pursue a similar repatriation of its 1,236 tonnes held at the New York Fed, the effects on the physical market would be more pronounced. Such a move would require sourcing, refining to current delivery standards, and physically transporting the gold, generating real demand pressure within the LBMA system, even though global central bank holdings would remain unchanged.
This scenario is not currently priced in by markets. While the German repatriation debate remains largely political and the Bundesbank has given no indication of imminent action, the underlying drivers that prompted France’s earlier decision—bar standard considerations, proximity to European counterparties, and a geopolitical preference for domestic custody—are similarly relevant to Germany.
Understanding the De-Dollarisation Trend
Gold repatriation is frequently framed as a symbolic geopolitical gesture, but its implications are more tangible. When central banks repatriate gold, they also reduce their dependence on the dollar-based financial system, including its clearing mechanisms, custodial arrangements, and settlement infrastructure. Each tonne of gold brought back reduces exposure to dollar-linked channels and potential sanctions risk.
This shift is already becoming measurable. By early 2026, the value of gold held by central banks exceeded their holdings of US Treasuries—approximately $4 trillion compared with $3.9 trillion. This signals a gradual but persistent move away from the US dollar’s role as the dominant reserve asset. Unlike traditional currency diversification, this transition is difficult to capture fully in official statistics, yet it is ongoing, accelerating, and still not fully reflected in market pricing.
Historically, gold prices have tended to decline when the US dollar strengthens and real interest rates rise. However, this relationship has weakened since 2022, as central banks have emerged as significant buyers driven more by geopolitical considerations than by traditional market indicators such as yields or currency movements. This introduces a form of demand that is relatively insensitive to price.
Consequently, conventional gold valuation models are becoming less reliable and often understate price levels. This shift also helps explain why institutions such as Goldman Sachs, J.P. Morgan, and UBS are projecting significantly higher gold prices than would have been considered plausible prior to 2022. In effect, the pricing dynamics of gold have evolved, while many existing models have yet to fully adjust.
Conclusion
The structural argument for gold repatriation is compelling, but it is not without inconsistencies. Recent conflicts in the Middle East have added further complexity, at times pressuring both gold and the US dollar simultaneously and disrupting traditional market correlations. Central banks also do not act as a single coordinated group—some are accumulating gold, others are repatriating it, while some are still selling under financial or policy constraints.
Although data from the World Gold Council, analyst price targets, and observable repatriation flows support the broader trend, the pace is uneven and motivations vary significantly across institutions. Gold continues to function as a form of monetary insurance, but its behavior and underlying drivers are more nuanced and less linear than the prevailing narrative often implies.
Markets are increasingly betting that the conflict with Iran has come to an end. Yet even if that assumption holds, the economic repercussions are likely to persist for months—if not years.
While global attention tends to center on the immediate spectacle of war—airstrikes, blockades, and sanctions—the most disruptive consequences often emerge more slowly. In the Persian Gulf, the true impact is delayed, carried across the world through disrupted shipping routes and declining exports of oil, natural gas, and key agricultural inputs. Because of these lags, the global economy is only beginning to absorb the shock from reduced supply.
As Comfort Ero of the International Crisis Group observes, wars expose the fragile systems that quietly sustain everyday life. Strategic chokepoints like the Strait of Hormuz—normally overlooked—suddenly become critical when they falter.
Oil shipments from the Gulf typically take between 30 and 45 days to reach major markets. That delay means supply disruptions don’t show up immediately. Instead, countries draw down existing inventories while incoming supply gradually shrinks. By the time shortages become visible, the disruption has already been building for weeks.
Recent data underscores this dynamic. OPEC output plunged by 27% in March, signaling the first wave of global supply strain. Even under a sustained ceasefire, a rapid recovery appears unlikely. Industry leaders estimate it could take months for production in the region to return to normal levels.
At the same time, the easing of military tensions may create a false sense of stability. Beneath the surface, the economic damage continues to accumulate. Supply chain pressures are only now intensifying. Companies are beginning to feel the strain—illustrated by manufacturers halting orders due to shortages tied to disruptions in the energy supply chain.
The agricultural sector offers another clear example. With planting season nearing its end, rising fertilizer and fuel costs are forcing farmers to make difficult choices: cut back production or absorb significant financial losses. Many are already reporting deteriorating financial conditions.
Although limited shipping activity has resumed through the Strait of Hormuz, it remains uncertain how quickly normal export levels can be restored. Even if the passage reopens soon, the broader damage—to infrastructure, refining capacity, and logistics networks—will take far longer to repair, ensuring that the war’s economic aftershocks continue well into the future.
Oil isn’t the only export under threat. The Persian Gulf also supplies large volumes of natural gas liquids, ammonia, urea, and other petrochemical inputs that are vital to global fertilizer production. Prolonged disruptions to these flows could ripple through agricultural supply chains worldwide.
Even a short delay in shipments can trigger cascading effects—tightening fertilizer supplies, reducing crop yields, and driving up food prices months down the line.
In this sense, the war’s impact on oil and fertilizer inputs resembles a slow-building shockwave. For now, the global economy is cushioned by existing inventories and shipments made before the conflict. But as those buffers wear thin, declining exports from the Gulf are likely to place increasing strain on energy markets, food production, and overall economic stability.
The most significant consequences are not in the past—they are only starting to surface.
Silver remained under pressure as rising oil prices—driven by renewed tensions in the Strait of Hormuz—intensified inflation concerns. Meanwhile, Iran accused the U.S. of violating the ceasefire after firing on a commercial vessel and warned of imminent retaliation, while also reversing plans to reopen the strait after Washington refused to lift its blockade on Iranian ports.
Silver (XAG/USD) trimmed losses to trade near $80.50 per ounce in Asian hours, but remained under pressure as a surge in oil prices—driven by renewed Strait of Hormuz tensions—heightened inflation risks and expectations of further rate hikes.
The situation escalated after Iran accused the U.S. of breaching a ceasefire by attacking a commercial vessel, while Washington confirmed seizing an Iranian ship. Tehran also отказed to resume negotiations, reversed its brief plan to reopen the strait after the U.S. maintained its port blockade, and warned of retaliation as geopolitical tensions intensified.
Oil
WTI crude climbed to around $86.70 in early Asian trading, supported by the renewed closure of the Strait of Hormuz, which heightened supply concerns, while Iran warned of imminent retaliation following a U.S. naval seizure.
WTI crude traded near $86.70 in early Asian hours on Monday, supported by escalating U.S.–Iran tensions in the Strait of Hormuz that raised fears of supply disruptions. Iran accused the U.S. of breaching a ceasefire after attacking a commercial vessel and warned of retaliation, while also rejecting new peace talks despite Washington’s push for further negotiations.
Meanwhile, traders are awaiting Tuesday’s API inventory report, with a larger draw likely to support prices and a build potentially weighing on the market.
Gold prices initially declined during the week but found solid support around the $4,600 level, allowing the market to rebound and climb back above $4,800. The easing interest rate environment in the United States remains a key driver, as gold typically moves inversely to rates—falling when rates rise and gaining when they decline.
Following Iran’s announcement that ships would be allowed to pass through the Strait of Hormuz without disruption during the ceasefire, prices moved higher again. Overall, the outlook suggests that short-term dips will continue to attract buyers, with the market likely targeting the $5,000 level—unless an unexpected negative event intervenes.
USD/CHF
The US dollar declined once more against the Swiss franc, settling near the 0.78 level by the end of the week. This pair remains particularly intriguing, as the interest rate differential continues to support the US dollar, while the Swiss National Bank has shown a clear willingness to step in if the franc strengthens excessively.
I would be watching for a buy-on-dips opportunity in the coming week, particularly if the 0.78 level holds as support. On the upside, the 0.80 level serves as a potential target, while on the downside, the 0.7650 level could act as key support.
AUD/USD
The Australian dollar posted a strong performance over the week, though Friday’s candlestick suggests it may be surrendering some of those gains, making near-term price action worth monitoring closely. Interest rate differentials continue to support the Aussie against many currencies, alongside strength in key commodities—particularly gold—that underpin its value.
The US dollar is currently under pressure as easing interest rates—driven by positive developments in the Middle East—continue to weigh on it. This trend is likely to persist, suggesting that any pullback in the Australian dollar, barring a renewed escalation in the region, could present a buying opportunity.
GBP/USD
The British pound has climbed notably over the course of the week, briefly breaking through the 1.3550 level, but it has struggled to hold above it. This is a currency pair I’ll be monitoring very closely.
I think the market is likely to remain quite noisy, with choppy price action. In the short term, it may push higher if the flow of positive news continues.
DAX
The German index posted a solid week, pushing toward the 25,000 level. This is a major round number with strong psychological importance, likely drawing a lot of attention and serving as a target. It’s also a clear level that has acted as resistance in the past.
A break above the 25,000 level could pave the way for a move toward 25,400. In the near term, any pullbacks are likely to be seen as buying opportunities, provided the news flow stays supportive. However, it’s important to watch Germany’s energy situation closely—any renewed disruption to oil supplies could have a serious negative impact.
BTC/USD
The Bitcoin market is one I’ve been following for some time, and it’s encouraging to see a breakout to the upside. With interest rates in the U.S. declining, assets like Bitcoin could begin to draw more attention. It now appears the market may be shifting direction, potentially targeting the $80,000 level, with $84,000 as the next area of interest.
Near-term dips may present buying opportunities. I’m not interested in shorting Bitcoin, as it showed strong resilience during the Middle Eastern conflict.
Silver
Silver has surged past the $80 level as U.S. interest rates have declined. Given the typical inverse relationship between rates and silver, this move doesn’t come as much of a surprise.
Keep a close watch on the U.S. 10-year yield—if it climbs back above 4.30%, it could weigh on silver. For now, though, short-term dips may still offer buying opportunities. Expect volatility, as that’s typical for silver, and be sure to manage your position size carefully.
EUR/USD
The euro climbed enough to break above the 1.18 level, but notably gave back some of those gains late on Friday. I’ll be keeping an eye on this pair, as it could start to pull back if broader euro weakness emerges.
A break above the weekly candlestick could open the door for a move toward the 1.20 level. However, if the market pulls back, we may simply remain within the broad range that dominated much of last year—something that can still offer solid trading opportunities. On the downside, the 1.17 and 1.16 levels are likely to act as support.
Gold continues to trade in a narrow range below the $4,800 mark early Friday, failing for a third straight day to hold above that level. Market participants remain cautious as they await clearer direction from upcoming US–Iran peace talks, while the metal still looks set for a fourth consecutive weekly gain.
Fundamental Overview
With the two-week US–Iran ceasefire set to expire on April 22, uncertainty around both the timing and outcome of the next round of negotiations continues to unsettle investors, keeping Gold prices fluctuating within a familiar range.
Upside momentum in Gold remains limited, pressured by the recent rebound in Oil prices amid ongoing concerns about supply disruptions tied to the US naval blockade of the Strait of Hormuz. Higher Oil prices have revived inflation fears, reinforcing expectations that major central banks—including the US Federal Reserve (Fed)—may maintain a tighter monetary policy stance.
Late Thursday, the US Central Command (CENTCOM) stated that the USS Abraham Lincoln is operating in the Arabian Sea as part of a large-scale enforcement of the blockade on Iranian ports, involving more than a dozen ships, over 100 aircraft, and around 10,000 personnel, with no reported violations so far.
Meanwhile, a modest rebound in the US Dollar from near six-week lows is adding further pressure on USD-denominated Gold.
That said, downside risks for the precious metal appear limited. A newly announced 10-day ceasefire between Israel and Lebanon has lifted hopes for a near-term de-escalation in the Middle East, reducing safe-haven demand for the US Dollar and offering some support to Gold.
Heading into the weekend, Gold remains directionless and highly sensitive to developments on the Middle East front. Thin end-of-week flows could also amplify price swings, especially amid lingering uncertainty over US–Iran negotiations and the durability of the Israel–Lebanon truce.
From a technical perspective, the daily chart setup adds another layer of intrigue, keeping traders focused on both geopolitical headlines and key chart signals for the next move.
XAU/USD Technical Overview
On the daily chart, XAU/USD is trading around $4,789.50, with price action confined between key support levels and overhead resistance. The metal remains supported above the 21-day and 100-day SMAs, near $4,646 and $4,715 respectively, but continues to struggle below the 50-day SMA at $4,897 and a descending trendline resistance around $4,792. The Relative Strength Index (14), hovering near 51, points to neutral momentum with a slight bullish tilt, indicating consolidation rather than a clear breakout as price lingers just beneath trend resistance.
At the same time, bearish signals persist in the background. A Bear Cross between the 21-day and 100-day SMAs confirmed on April 13, along with a similar crossover seen on March 25, continues to weigh on bullish prospects.
Looking higher, immediate resistance is seen at the descending trendline near $4,792. A decisive daily close above this level could pave the way toward the 50-day SMA at $4,897 as the next upside target. On the downside, initial support lies at the 100-day SMA around $4,715, followed by a broader ascending trendline zone in the mid-$4,500s, which reinforces demand ahead of the 21-day SMA near $4,646. Only a sustained break below these support layers would expose the longer-term 200-day SMA near $4,215.
Gold stays under pressure but lacks strong follow-through selling amid mixed signals. The US dollar finds support from ongoing Hormuz-related risks, acting as a headwind for the metal. However, optimism over Iran diplomacy and easing expectations for Fed rate hikes help cap the dollar, providing some support to bullion.
Gold (XAU/USD) trims its earlier losses from the Asian session, rebounding from the $4,768–$4,767 area—a three-day low—but struggles to build momentum and stays below the $4,800 level amid mixed signals. While diplomatic efforts to resolve the Middle East conflict are intensifying, lingering tensions between the US and Iran, particularly due to the ongoing US naval blockade of Iranian ports, continue to support the US Dollar’s safe-haven appeal and weigh on the metal.
At the same time, a 10-day ceasefire between Israel and Lebanon has raised hopes for a broader US-Iran agreement. US President Donald Trump struck an upbeat tone, suggesting Iran is close to a deal, and reports indicate both sides have agreed in principle to resume talks, though details remain undecided. These developments support a more positive market mood, which, alongside reduced expectations of further Federal Reserve rate hikes, limits the USD’s rebound from recent lows and helps cushion Gold’s downside.
Earlier in the week, US Producer Price Index (PPI) data eased concerns about inflation stemming from rising energy costs linked to the conflict. Additionally, expectations of easing geopolitical tensions have kept Crude Oil prices subdued, softening hawkish Fed expectations. Markets are now pricing in about a 30% chance of a Fed rate cut by year-end, restraining USD strength and providing support for non-yielding assets like Gold. As such, traders may prefer to wait for stronger selling pressure before anticipating a deeper pullback from the recent one-month high.
Looking ahead, the absence of key US economic data on Friday leaves the USD influenced by speeches from FOMC members. However, attention will remain focused on potential US-Iran talks over the weekend, with headlines likely to drive volatility and create trading opportunities in Gold. Despite recent fluctuations, XAU/USD is still on track for modest gains for a third consecutive week.
Gold H4 chart
From a technical standpoint, the failure to break above the 200-period SMA on the 4-hour chart overnight signals a note of caution for bullish traders. Although prices pulled back afterward, the decline found support ahead of the 50% retracement of the March drop, suggesting that traders may prefer to wait for a decisive move below the $4,765 support area before anticipating deeper losses.
Momentum indicators offer a mixed picture. The RSI is hovering around the neutral 50 level, while the MACD remains below the zero line in negative territory, indicating that sellers still hold a near-term edge. For sentiment to improve, price would need to reclaim the 200-period SMA near $4,814, followed by a stronger resistance at the 61.8% Fibonacci retracement around $4,912. A sustained breakout above these levels could shift the outlook more positively and pave the way toward $5,130 and $5,409.
On the downside, immediate support lies near the 50% retracement at $4,759. A break below this level could lead to further declines toward $4,606 and then $4,416, where buyers may step in more aggressively to defend the broader uptrend.
The United States came close to becoming a net crude exporter last week for the first time since World War II, as exports surged to near-record levels to satisfy demand from Asia and Europe, where buyers were scrambling to replace Middle Eastern supplies disrupted by the Iran conflict. The war involving the U.S., Israel, and Iran caused an unprecedented shock to global energy markets, with threats to shipping through the Strait of Hormuz halting roughly 20% of global oil and gas flows. As a result, refiners in affected regions turned to alternative sources, significantly increasing demand for U.S. crude, though analysts note exports are nearing capacity limits.
Net U.S. crude imports dropped to just 66,000 barrels per day last week—the lowest level since records began in 2001—while exports rose to 5.2 million bpd, a seven-month high. Historically, the U.S. was last a net crude exporter in 1943. Strong export growth reflects how buyers in Europe and Asia are reaching further afield for supply, with price differences offsetting shipping costs. Countries like Greece have recently begun importing U.S. crude for the first time, and major buyers include the Netherlands, Japan, France, Germany, and South Korea. Nearly half of U.S. exports went to Europe, while Asia’s share has grown significantly.
Meanwhile, U.S. imports fell sharply, partly because domestic refineries rely on heavier crude than what the U.S. typically produces. A widening price gap—driven by a surge in Brent crude relative to West Texas Intermediate—has made U.S. oil more attractive overseas while reducing domestic demand for imports. Spot prices for crude deliveries to Europe and Africa have also hit record highs.
Despite strong demand, U.S. export growth is approaching logistical limits. Exports may average around 5.2 million bpd in April, close to the estimated maximum capacity of about 6 million bpd, constrained by pipeline infrastructure and tanker availability. Although releasing medium sour crude from strategic reserves could free up more light crude for export, higher shipping costs and limited tanker supply could dampen further growth. About 80 empty supertankers were reportedly heading to the Gulf of Mexico, likely to load crude in the coming weeks.
Oil prices declined for a second consecutive day on Wednesday as expectations grew that peace talks between the U.S. and Iran could resume, potentially restoring supply from the Middle East that has been disrupted by the closure of the Strait of Hormuz.
Brent crude slipped 0.55% to $94.27 per barrel after a sharp 4.6% drop in the previous session, while U.S. West Texas Intermediate fell 1.1% to $90.24 following an even steeper 7.9% decline earlier.
Investor sentiment improved after President Donald Trump suggested that negotiations to end the conflict involving the U.S., Israel, and Iran could restart in Pakistan within days. The earlier breakdown in talks had led Washington to impose a blockade on Iranian ports, but renewed diplomatic hopes are raising expectations that oil and fuel flows could eventually resume.
The conflict has effectively shut down the Strait of Hormuz, a crucial route for transporting crude and refined products from the Gulf to global markets, particularly in Asia and Europe. Although a ceasefire has been in place for two weeks, shipping activity remains severely limited, with vessel traffic far below pre-war levels.
On Tuesday, a U.S. warship reportedly prevented two oil tankers from departing Iran, underscoring ongoing disruptions. Analysts at the Schork Group noted that while diplomatic developments hint at easing restrictions, actual conditions on the ground remain unstable, leaving markets focused on the risk of supply disruptions rather than a full recovery.
Further tightening supply concerns, U.S. officials indicated that sanctions waivers on Iranian oil shipments will not be renewed, and a similar waiver for Russian oil has already expired.
Later in the day, attention will turn to U.S. inventory data from the Energy Information Administration. Expectations are for a modest increase in crude stockpiles, alongside declines in gasoline and distillate inventories. Meanwhile, preliminary data from the American Petroleum Institute suggested that crude inventories rose for a third straight week.
Oil prices slipped in early Asian trading on Tuesday as renewed hopes for U.S.–Iran negotiations eased worries about supply disruptions linked to the U.S. blockade of the Strait of Hormuz.
Brent crude dropped $1.86 (1.87%) to $97.50, while WTI fell $2.25 (2.27%) to $96.83. This pullback followed strong gains in the previous session, when prices surged after the U.S. launched a blockade of Iran’s ports.
The U.S. military expanded the blockade beyond the strait into the Gulf of Oman and the Arabian Sea, with early signs of disruption already visible as ships began turning back. In response, Iran warned it could target ports in neighboring Gulf countries after weekend talks in Islamabad failed to produce a resolution.
Despite the breakdown, optimism lingered as both sides signaled a willingness to keep negotiations alive. Analysts noted that even the hint of a potential deal helped cool the rally in oil prices.
Market estimates suggest roughly 10 million barrels per day of supply have already been affected, with the risk of further losses if the blockade continues. Still, analysts argue that tight supply conditions alone may be enough to keep prices elevated.
Meanwhile, NATO allies such as Britain and France declined to support the blockade, instead pushing for the reopening of the key shipping route. U.S. officials indicated prices could peak in the coming weeks if flows resume.
Global institutions, including the IMF, World Bank, and IEA, urged countries to avoid hoarding or restricting exports, warning of a major shock to the energy market. OPEC also trimmed its global demand forecast for the second quarter by 500,000 barrels per day.
WTI surges about 8% toward $100 after the U.S. blocks the Strait of Hormuz Strait of Hormuz.
West Texas Intermediate (WTI) – the US crude benchmark – started the week with a bullish gap, rising around 8% as it moves back toward the $100 level.
The rally follows renewed escalation in tensions between the United States and Iran after weekend peace talks lasting 21 hours collapsed.
US President Donald Trump responded by pledging a blockade of Iranian ports and maritime traffic through the Strait of Hormuz.
The US Central Command (CENTCOM) also stated that forces will begin restricting all vessel movement in and out of Iranian ports from Monday at 10:00 AM ET (14:00 GMT).
According to a Wall Street Journal report, Trump and his advisers are also considering limited military strikes on Iran alongside the blockade to increase pressure in stalled negotiations.
Market attention now shifts to further details on the blockade and its potential impact on the already fragile US–Iran ceasefire.
EUR/USD extends its gains as bullish momentum builds, with traders targeting further upside.
EUR/USD has extended its upside momentum, breaking higher after a decisive technical breakout.
The pair began a fresh rally above 1.1650 and moved beyond a key contracting triangle resistance at 1.1610 on the 4-hour chart.
Price action is now trading above 1.1665 as well as both the 100-period (red) and 200-period (green) simple moving averages, confirming a stronger bullish structure. The breakout has already driven the pair toward the 1.1740 area.
If buyers maintain control, the next upside targets are seen at 1.1780, with initial major resistance at 1.1800. A sustained break above this level could open the path toward 1.1840, and a further close above it would expose potential gains toward 1.1920 and even the 1.2000 psychological level.
On the downside, immediate support lies near 1.1685, aligning with the 23.6% Fibonacci retracement of the recent move from 1.1505 to 1.1739. Key support follows at 1.1620 and the 1.1600 region, which also aligns with the 200-SMA. A breakdown below 1.1600 could shift momentum lower toward the 100-SMA, with deeper losses potentially reopening the 1.1500 area.
One of the most compelling charts this week is Bitcoin. Despite widespread hesitation and global risk aversion, it has remained relatively resilient instead of breaking down. In addition, Wall Street–based ETFs tied to Bitcoin continue to attract inflows, even as overall market sentiment stays cautious.
That said, this suggests a level of resilience in the Bitcoin market that shouldn’t be overlooked. At some point, the market will need to make a longer-term move, and based on current signals, it appears to be leaning toward a bullish outcome.
This outlook is somewhat logical, considering Bitcoin has already dropped around 50% from its highs. For long-term holders, that kind of correction often signals a potential buying opportunity. While I’m not strongly bullish on Bitcoin overall, the technical picture indicates that a move above $76,000 could quickly become significant.
NASDAQ 100
The Nasdaq 100 moved higher over the week, largely driven by the ceasefire announcement, which boosted overall risk appetite. By the end of the week, the index was hovering around the 25,000 level. However, with key talks taking place in Pakistan over the weekend, market sentiment could shift quickly as early as Monday. For this reason, I remain optimistic about equities—but only with a strong sense of caution.
USD/MXN
The US dollar declined sharply against the Mexican peso over the week as risk appetite returned. It’s also important to note the significant interest rate gap between the two economies, which encourages traders to short this pair, as holding Mexican pesos allows them to earn daily carry.
It now appears that the pair is on the verge of breaking down toward the 17 peso level. However, that level may not matter much at this stage due to the upcoming meeting in Pakistan over the weekend. If the outcome is negative, the US dollar is likely to strengthen; if not, the current downward trend should continue.
DAX
Germany’s DAX ended the week in positive territory, although it closed on a weak note on Friday. This likely reflects caution ahead of the weekend meeting, as Germany remains highly sensitive to energy supply risks—particularly LNG from Qatar and crude shipments through the Strait of Hormuz. Any disruption there could create significant challenges for its industrial sector. As a result, many traders appear to be locking in profits and reducing exposure ahead of potentially impactful developments from the talks in Pakistan.
USD/CAD
The US dollar has declined against the Canadian dollar and is now hovering around both the 50-week EMA and the 200-day EMA, making a pause at this level quite reasonable. As with other markets, Monday’s open will likely be influenced by developments in Islamabad. Overall, this appears to be a market attempting to establish support before potentially moving higher. The 1.3750 level stands out as a key area to watch for a possible bounce if the pair continues to pull back, while the 1.40 level remains a significant resistance to the upside.
EUR/USD
The euro posted a solid rally over the week, largely supported by improving risk appetite. It has now climbed above the 1.17 level for the first time in about five weeks. If this momentum holds, the next target to watch would be the 1.18 level.
The 1.18 level represents a major resistance zone. However, if the talks between Iran and the United States produce positive outcomes, it could trigger a broad relief rally—potentially pushing this market higher along with others.
Silver
Silver has been volatile but clearly positive over the week as it continues to search for a bottom. The market is likely to remain choppy, and while a larger move will eventually take shape, it may not be the ideal time to take on significant positions.
Interest rates will remain a key driver here, so it’s important to watch the US 10-year yield closely. Generally, a move above 4.30% tends to be negative for this market—though it’s not a definitive rule, just one of several influencing factors. Additionally, developments coming out of Islamabad and the ongoing talks are likely to have a significant impact on interest rate expectations, which will in turn affect price action here.
Gold
The gold market has also moved higher, but this seems to have caught many traders off guard, as the main driver has been interest rates rather than geopolitical fear. Many people are puzzled by gold’s weakness during times of conflict, but the explanation lies in the bond market—yields are now significantly higher than before, prompting portfolio managers to shift allocations toward interest-bearing assets instead of gold.
I remain bullish on gold over the longer term, but I also recognize that a renewed spike in yields—possibly triggered by disappointing outcomes from the talks in Islamabad—could push the market down toward the $4,600 level. On the upside, the $5,000 mark stands out as the first major resistance zone.
Oil prices rose on Friday amid renewed concerns over supply disruptions from Saudi Arabia and continued minimal tanker movement through the strategically vital Strait of Hormuz.
Despite the gains, crude was still on track for a weekly decline as market fears eased slightly following a fragile two-week ceasefire between the United States and Iran. At the same time, Israel indicated a possible diplomatic shift, expressing readiness to start direct negotiations with Lebanon soon.
Brent crude increased by $0.96, or 1%, to $96.88 per barrel at 0604 GMT, while West Texas Intermediate (WTI) gained $0.78, or 0.80%, reaching $98.65 per barrel.
Both benchmarks are down roughly 11% so far this week, marking their steepest weekly drop since June 2025, when earlier Israeli-U.S. strikes on Iran were paused.
According to Saudi Arabia’s state news agency SPA, citing the Ministry of Energy, attacks on key energy infrastructure have reduced the kingdom’s oil output capacity by about 600,000 barrels per day and cut throughput on the East-West Pipeline by approximately 700,000 barrels per day.
Analysts at ANZ noted that these developments have intensified concerns about further supply disruptions.
Shipping activity through the Strait of Hormuz remained below 10% of normal levels on Thursday, despite the ceasefire, as Iran asserted control by instructing vessels to stay within its territorial waters.
Although Iran and the U.S. agreed to a two-week ceasefire mediated by Pakistan, clashes reportedly continued afterward.
Experts suggest Pakistan may attempt to broker a longer-term agreement, but its ability to enforce the reopening of the waterway remains limited.
A Tehran official also told Reuters that Iran is seeking to impose transit fees on ships passing through the Strait under any peace arrangement, an idea opposed by Western governments and the U.N. shipping agency.
The conflict, which began on February 28 following U.S. and Israeli airstrikes on Iran, has effectively disrupted one of the world’s most important energy corridors.
Energy consultant John Paisie of Stratas Advisors warned that Brent crude could surge to $190 per barrel if current shipping constraints persist, though prices would be more contained if flows improve, albeit still above pre-war levels.
Mukesh Sahdev, CEO of XAnalysts, emphasized that the critical issue is not whether the Strait of Hormuz reopens, but how quickly normal oil flows can resume.
Meanwhile, JPMorgan estimated that around 50 energy infrastructure sites across the Gulf have been damaged by drone and missile attacks since the conflict began, with approximately 2.4 million barrels per day of refining capacity taken offline.
Gold is once again being driven primarily by interest rates rather than risk sentiment, with US Treasury yields taking the lead as markets head into a heavy US data schedule.
The inverse relationship between gold and yields has strengthened notably, placing key inflation readings like CPI and core PCE at the center of attention. Prices are currently moving within a clear range, with support around $4700 and resistance between $4800 and $4850. The next directional move will likely depend on whether yields continue rising or begin to ease, while ongoing developments surrounding the US–Iran ceasefire remain a secondary influence.
This renewed sensitivity to yields signals a return to more traditional macro dynamics, following a period where gold traded more like a high-volatility risk asset.
Whether this rate-driven relationship will persist is still uncertain. However, with correlation coefficients currently sitting in the high negative 0.9 range across both short- and long-term Treasury yields, gold is now highly sensitive to movements in interest rates. This sharp linkage brings not only developments in the US–Iran ceasefire into focus, but also an upcoming wave of US economic data that is likely to challenge and validate the strength of this relationship in the near term.
Inflation data is set to put this relationship to the test.
While the Fed’s preferred inflation gauge, the core PCE deflator, is due later today, it may carry less weight as it reflects February data and predates the energy price shock linked to the Iran conflict. Instead, markets may focus more on income and spending figures for clues on consumption and broader economic momentum in the March quarter. Strong data could reignite concerns about rising inflation, while weaker numbers may ease pressure by signaling softer demand and hiring.
Following a weak 10-year Treasury auction midweek, attention may also turn to the 30-year bond auction for its impact on yields. Still, Friday’s release of March CPI is expected to be the key event. Headline inflation is likely to rise due to energy costs, but the critical question is whether those pressures spill into core inflation. Any reading above the 0.3% forecast could push markets to reconsider the possibility of Fed rate hikes rather than cuts this year.
Inflation expectations will also be in focus, with the University of Michigan’s 5-year outlook offering timely insight into consumer sentiment around future prices, wages, and spending.
If inflation surprises to the upside, Treasury yields are likely to climb—potentially weighing on gold given their strong inverse relationship. Conversely, softer inflation data could support bullion. Beyond economic data, developments surrounding the US–Iran ceasefire remain an important underlying risk factor.
Price action remains orderly and well-defined.
On the daily chart, the presence of a bearish pin bar reinforces the earlier signal that sellers are active in the $4800–$4850 zone, establishing it as a key overhead resistance area for traders.
A closer look at the H4 timeframe confirms both this resistance and the overall clarity of gold’s price action, especially given the broader macro volatility. The $4700 level, which previously acted as resistance, has now flipped into support and serves as the first downside level to watch. Below that, $4600 and $4550 emerge as additional support zones if the current range breaks.
On the upside, a sustained move above $4850 would open the door toward $4975, with the 50-day moving average sitting in between as a potential intermediate hurdle. Momentum indicators such as RSI (14) and MACD remain neutral, offering no strong directional bias and reinforcing the importance of reacting to price behavior around key levels.
From a short-term trading perspective, long positions could be considered above $4700 with tight risk control below that level, targeting a move back toward $4850 resistance. However, conviction in this setup is limited, and a confirmed bounce from $4700 would provide a more reliable entry signal.
Silver futures are trading within a key VC PMI decision zone after being rejected from the Daily Sell 1 level around $77.68 and failing to maintain momentum toward Daily Sell 2 at $79.96. Prices have since moved back below the Daily Mean of $75.51 and are now testing the Daily Buy 1 level at $73.23, indicating a shift from a bullish expansion phase into a mean reversion setup.
Based on VC PMI probabilities, a move into the Buy 1 level carries roughly a 90% chance of reverting back toward the mean. If the $73.23 level fails to hold, the market could extend its decline toward Daily Buy 2 at $71.06, where extreme conditions—with a 95% probability—often draw in institutional buying. The overlap with the Weekly Mean around $72.30 further strengthens this area as a key support pivot.
From a cyclical standpoint, the market is approaching a critical inflection period between April 8–10, when a directional move is likely to emerge. If prices hold above Buy 1 during this window, a rebound toward $75.53 and possibly a retest of $77.68 becomes the higher-probability scenario. On the other hand, a drop into Buy 2 within this timeframe could signal a final capitulation before a broader upward move.
Square of 9 geometry supports this structure, highlighting the $72–$73 area as a harmonic support zone, while upside levels at $77, $80, and $82 correspond to rotational resistance. A sustained breakout above $80.87 (Weekly Sell 2) would indicate a fractal shift, pushing the market into a higher trading range and confirming a longer-term bullish continuation.
Volume behavior points to accumulation during pullbacks, suggesting weaker long positions are being shaken out while stronger participants build exposure ahead of the next expansion phase. This reinforces the view that the current decline is corrective rather than structural.
Strategy: Buyers may consider gradually scaling in near Buy 1 and Buy 2 with disciplined risk control. Rather than chasing upward momentum, traders should wait for confirmation of reversal signals within the cycle window. A move back above the mean would signal a return of bullish momentum.
Goldman Sachs slightly lowered its second-quarter oil price outlook after the U.S.–Iran two-week ceasefire, which includes reopening the Strait of Hormuz, though it maintained its medium-term forecasts and warned that risks still lean to the upside.
Oil prices dropped to the mid-$90s per barrel following the announcement, in line with Goldman’s expectations that energy flows through the Strait would begin recovering quickly and that Persian Gulf exports would gradually return to pre-war levels within about a month.
The bank cut its Q2 forecasts for Brent and WTI to $90 and $87 per barrel, respectively, from earlier estimates of $99 and $91, citing a reduced geopolitical risk premium and early signs of improving oil flows. However, it left its second-half projections unchanged, with Brent seen at $82 and $80, and WTI at $77 and $75.
Despite the ceasefire, Goldman cautioned that the situation remains fragile and uncertain, with upside risks to prices driven by the possibility of prolonged disruptions or ongoing production losses. In a downside scenario where the ceasefire breaks down and reopening of the Strait is delayed, Brent could average $100 in Q4. In a more severe case involving sustained supply losses of 2 million barrels per day, prices could rise as high as $115.
On natural gas, European TTF prices fell sharply after the ceasefire. Goldman lowered its Q2 TTF forecast to 50 EUR/MWh from 70, citing weak Chinese LNG demand that has kept European supply relatively strong. Its second-half outlook remained broadly unchanged at 42 EUR/MWh, though risks are still skewed higher. If LNG flows are disrupted further, prices could surge above 75 EUR/MWh due to the need for significant demand destruction.
Could markets be misjudging both oil and the war, as this analyst argues?
Possibly—but what about the relationship between oil and gold? The mainstream narrative suggests that surging oil prices are a bearish signal for gold, based on claims that “gold yields no interest” and that “the Fed might raise rates by a quarter point (though it’s unlikely), while real inflation runs near 15%,” leading to the conclusion that “gold should decline sharply against fiat currencies.”
Western analysis of oil, war, and gold is deeply troubling—arguably even reprehensible. It feels like something straight out of a Nineteen Eighty-Four… except it’s happening in reality.
A closer look at currency market dynamics suggests that as interest rates rise, the heavily indebted U.S. government faces increasing borrowing needs to sustain its finances. This pressure can lead to policies that shift the burden beyond its borders, affecting global economic stability.
History offers parallels—such as Ancient Rome—where excessive debt strained state behavior and credibility. Some argue that similar pressures are emerging in modern fiscal systems.
In simple terms, critics of fiat systems view government-issued currency as vulnerable to mismanagement, while seeing gold as a more reliable store of value for individuals worldwide.
What are the most attractive price levels for investors to accumulate more gold? Looking at the daily chart, the $4,400 range previously acted as a strong buying zone, while $4,100 represented a secondary level of support.
That said, investors may benefit more from focusing on time rather than precise price points. If gold trades within a range for the rest of the year, a disciplined accumulation strategy—such as monthly purchases (or weekly for more aggressive investors)—could be more effective.
Time-based buying helps reduce the emotional stress of trying to predict short-term price movements, which often leads to cycles of fear and greed.
Ultimately, steadily increasing gold holdings may matter more than timing the exact entry. Still, from a price perspective, the $5,600, $3,900, and $3,500 levels could all serve as attractive accumulation zones if the market pulls back.
If gold were to climb into the $6,500–$7,500 range, then $5,600 could become a particularly significant support level—potentially one of the most important in the market’s history. From there, some bullish scenarios suggest the possibility of a powerful rally toward $15,000–$20,000.
Such dramatic price action would likely require major catalysts—such as sustained inflation, escalating debt pressures, geopolitical instability, or a significant loss of confidence in fiat currencies.
The U.S. interest rate chart is drawing attention, with what appears to be a large inverse head-and-shoulders pattern suggesting a potential move toward the 7%–8% range.
At the same time, many argue that the real inflation experienced by average Americans may be closer to 8%–15%, higher than official figures. If that view gains traction, the prevailing institutional narrative—where rising rates are seen as negative for gold—could shift.
Instead, rising rates might come to be interpreted as a signal that inflation is persistent and that government financing pressures are intensifying. In that scenario, investors could increasingly turn to gold, viewing it as a hedge and continuing to accumulate it over time.
A long-term view of the 40-year U.S. inflation–deflation cycle suggests that policy shifts could have major consequences. If a future Fed leader—such as Kevin Warsh—were to scale back quantitative easing, government borrowing pressures would likely remain.
Even without aggressive rate hikes from the Federal Reserve, market forces themselves could push interest rates higher.
For investors, maintaining a focus on the broader macro picture is essential. Key factors shaping the landscape include inflation trends, tariffs, geopolitical tensions, elevated equity valuations, debt ceiling challenges, and potential shifts in global economic leadership.
Critics argue that instead of implementing significant spending cuts, policymakers have relied on measures like tariffs, which may contribute to inflationary pressure. At the same time, rising fiscal deficits and geopolitical risks could undermine confidence in government bonds, prompting central banks and institutional investors to reduce their holdings.
This dynamic may create a feedback loop: higher debt levels, rising borrowing costs, and declining bond demand reinforcing one another.
In that context, some bullish perspectives suggest that gold could see substantial long-term gains, while interest rates could continue trending higher—though projections as extreme as $20,000 gold or 20% rates remain highly speculative and dependent on extraordinary economic conditions.
And what about the miners? The GDX chart looks particularly impressive, with a clear inverse head-and-shoulders pattern forming. The head developed around the critical $85 support level, where the 14,7,7 Stochastics oscillator also signaled a bottom.
After a brief two-day pullback, price is now hovering near $92—potentially setting up as a springboard for the next upward move. At the same time, a broader buy signal from the 20,40,10 MACD indicator appears to be on the verge of triggering—possibly as soon as today.
Markets have rebounded strongly after President Donald Trump chose to halt military action against Iran, but improved risk sentiment doesn’t change the bigger picture—oil prices are likely to stay elevated.
A clear relief rally is underway. US equity futures jumped almost immediately following the announcement of a two-week pause, with the Dow, S&P 500, and Nasdaq-100 all moving sharply higher. Meanwhile, oil prices, which had surged on fears of supply disruptions in the Strait of Hormuz, retreated as traders quickly unwound worst-case positions.
The speed of the reaction highlights how markets had been positioned for escalation. Defensive strategies were widespread, volatility was high, and crude prices had already priced in a significant geopolitical premium. Removing even part of that risk triggered a rapid reversal.
This strong rally also reflects how stretched investor sentiment had become. Markets were preparing for a scenario where a substantial share of global oil supply could be disrupted. Even a temporary easing of those fears prompted a swift shift back into equities.
Equity markets had already hinted at a possible de-escalation. Despite increasingly aggressive rhetoric, indices had begun to stabilize, suggesting investors anticipated some form of pause. The confirmation has now accelerated the move back into risk assets.
Technology stocks are expected to lead the recovery. The sector had been hit hardest by rising yields and risk aversion, but slightly lower oil prices help ease inflation concerns, supporting valuations—especially for large-cap and AI-driven companies.
Consumer sectors should also benefit quickly. Lower oil prices reduce fuel costs, boosting household purchasing power. Airlines, travel firms, and retailers are particularly well positioned to gain from improved sentiment and lower input expenses.
Financial stocks are also likely to rise. Greater stability encourages deal-making, strengthens capital markets activity, and eases pressure on credit conditions. Banks typically perform better when uncertainty declines and risk appetite increases.
Energy stocks, however, face a more mixed outlook. In the short term, falling crude prices may weigh on them. But underlying supply constraints remain unresolved, inventories are still tight, and geopolitical fragmentation continues to influence energy flows.
There’s a reason oil prices remain significantly higher this year. The risks go beyond the current conflict. Even if shipping through Hormuz resumes, it only provides temporary relief and does not fix deeper vulnerabilities in global energy supply chains.
As a result, oil is unlikely to fall back to previous lows anytime soon. A geopolitical premium is now built into prices, and traders will continue to factor in the risk of renewed disruptions.
Attention now turns to whether the two-week pause will hold. Temporary ceasefires often come with uncertainty, effectively starting a countdown. Markets will be watching closely to see if diplomacy can turn this into a longer-term solution.
Key factors include compliance with the pause, coordination over shipping routes, and the tone of ongoing negotiations. Meaningful progress could extend the rally further, lifting industrials, cyclical sectors, and emerging markets.
However, if diplomacy fails, sentiment could reverse quickly. Oil prices would likely surge again, volatility would return, and recent equity gains could be erased.
For now, investors are navigating a narrow path between opportunity and risk. The current rally is driven by reduced immediate fear, but underlying tensions remain unresolved—and energy markets continue to reflect that uncertainty.
Positioning for short-term gains may be reasonable, but any sustained upside will depend entirely on whether diplomatic efforts lead to lasting progress.
U.S. President Donald Trump on Tuesday agreed to a two-week ceasefire with Iran just hours before his deadline for Tehran to reopen the Strait of Hormuz or face major strikes on civilian infrastructure. The move marked a sharp reversal from his earlier warning that catastrophic consequences would follow if his demands were ignored. Pakistan’s military chief Asim Munir and Prime Minister Shehbaz Sharif played a key role in brokering the deal, with talks potentially set to continue in Islamabad.
The agreement hinges on Iran easing its blockade of the strategic waterway, which carries about 20% of global oil shipments. In response, Iran signaled it would halt counterattacks and allow safe passage if hostilities against it cease. While Trump hailed the deal as a “total victory” and a step toward long-term peace in the Middle East, Iranian officials framed it as a win for their own conditions being accepted.
Despite optimism, uncertainty remains over whether the ceasefire will hold, with some officials viewing it as a temporary confidence-building measure. Israel backed the pause in strikes on Iran but indicated the truce does not extend to Lebanon, highlighting conflicting interpretations of the agreement. Meanwhile, hostilities appeared to continue shortly after the announcement, with missile activity reported and defensive systems activated across the region.
Markets reacted positively to the news, with oil prices dropping, stocks rising, and the dollar weakening amid hopes that trade through the Strait of Hormuz could resume. Global leaders welcomed the development, noting both the economic risks and human toll of the six-week conflict, which has killed more than 5,000 people. Analysts suggest the ceasefire may reflect growing pressure on Trump to de-escalate a prolonged and unpopular war, while still framing the outcome as a strategic success.
Gold prices dipped in Asian trade on Tuesday, marking a third consecutive day of losses, as investors grappled with inflation and interest-rate concerns ahead of U.S. President Donald Trump’s looming deadline on Iran. Spot gold eased about 0.2% to roughly $4,640 an ounce by early U.S. trading, while U.S. gold futures also retreated. Markets had closed lower on Monday after a volatile session.
Trump’s warning to Iran fuels concerns about rising inflation.
Trump’s escalating rhetoric on Iran added to inflation concerns, even as geopolitical tensions intensified. He warned that Iran could face severe consequences if it failed to reopen the Strait of Hormuz by his Tuesday 8 p.m. ET deadline, increasing fears of a wider conflict in the Middle East.
The standoff has already disrupted global energy supplies and driven oil prices higher, further fueling inflation expectations and clouding the outlook for monetary policy.
Although gold is usually supported by geopolitical uncertainty, it has instead weakened as rising oil prices feed inflation worries and reduce the likelihood of near-term interest rate cuts by the U.S. Federal Reserve.
Higher interest rates tend to weigh on non-yielding assets like gold, while a stronger dollar has also added pressure on bullion prices.
Iran has turned down a U.S. proposal for a ceasefire.
Diplomatic efforts to ease the conflict have made limited headway. Iran has rejected a U.S.-backed proposal for a 45-day ceasefire and a phased reopening of the Strait of Hormuz.
Instead, Tehran is pushing for a comprehensive settlement that includes sanctions relief, security assurances, and compensation for damages.
The absence of any breakthrough has increased uncertainty in financial markets, with investors closely monitoring developments ahead of Trump’s deadline.
Market participants are also awaiting key U.S. inflation figures due on Friday, which are expected to offer further signals on the Federal Reserve’s interest rate path.
In other precious metals, silver declined 0.9% to $72.16 per ounce, while platinum fell 1% to $1,963.60 per ounce. Meanwhile, copper prices moved higher, with benchmark London Metal Exchange futures rising 0.7% to $12,422.5 a ton, and U.S. copper futures edging up 0.3% to $5.62 per pound.
Iran has prepared its reply to the proposed ceasefire terms, according to a foreign ministry spokesperson.
Iran has outlined its positions and demands in response to recent ceasefire proposals delivered through intermediaries, a foreign ministry spokesperson said Monday, stressing that negotiations cannot proceed under ultimatums or threats of war crimes.
Spokesperson Esmaeil Baghaei noted that Tehran’s requirements—based on national interests—have already been communicated via intermediary channels, while earlier U.S. proposals, including a 15-point plan, were rejected as excessive.
He emphasized that clearly stating Iran’s legitimate demands should not be seen as compromise, but as confidence in defending its stance. Baghaei added that Iran has prepared its responses and will disclose further details in due course.
US and Iran consider a peace proposal as Trump warns of severe retaliation if the Strait remains closed.
The United States and Iran have received an outline for ending the conflict, but Tehran has refused to immediately reopen the Strait of Hormuz, even after Donald Trump warned of severe consequences if no deal is reached by Tuesday.
According to a source, the proposal follows a two-stage plan: an immediate ceasefire, followed by a broader agreement to be finalized within 15–20 days. Pakistan’s army chief, Asim Munir, has reportedly been in continuous contact with U.S. Vice President JD Vance, envoy Steve Witkoff, and Iran’s foreign minister Abbas Araqchi.
Iran, however, has rejected reopening the Strait under a temporary truce and dismissed imposed deadlines, while also expressing doubts about Washington’s commitment to a lasting ceasefire.
Earlier, Axios reported that the U.S., Iran, and regional mediators were exploring a potential 45-day ceasefire as part of a phased deal toward ending the war.
Trump, posting on Truth Social, issued a deadline of Tuesday evening, threatening further strikes on Iran’s infrastructure if the Strait remains closed.
Meanwhile, airstrikes continued across the region, more than five weeks into the conflict involving the U.S., Israel, and Iran. Tehran has responded by effectively shutting the Strait—through which about 20% of global oil and gas flows—and launching attacks on Israel, U.S. bases, and energy sites in the Gulf.
Officials in the UAE emphasized that any agreement must ensure free passage through the Strait, warning that failing to curb Iran’s nuclear and missile capabilities could lead to greater regional instability.
Despite repeated U.S. claims of weakening Iran’s military capacity, recent Iranian strikes on petrochemical facilities and vessels in Kuwait, Bahrain, and the UAE highlight its continued ability to retaliate.
The conflict has caused heavy casualties: thousands have died in Iran, including many civilians, while Israel and Lebanon have also suffered significant losses as fighting spreads, including clashes with Iran-backed Hezbollah forces.
UBS remains bullish on gold, expecting prices to hit fresh highs this year as upside risks continue to build, according to strategist Joni Teves in a Thursday note.
Gold has faced pressure recently, as markets reacted to the inflationary effects of rising oil prices and the possibility of further interest rate hikes. Higher U.S. real yields and a stronger dollar have also weighed on the metal.
Despite this, Teves views recent declines as buying opportunities. He noted that the likelihood of gold extending its bull run over the next few years is increasing, particularly if weaker economic growth leads to fiscal or monetary stimulus—factors that would support higher prices. UBS reiterated that its overall outlook remains unchanged, continuing to expect new highs this year and encouraging investors to use pullbacks to build positions.
The bank now forecasts gold to average $5,000 per ounce in 2026, slightly lowered from its previous $5,200 estimate due to recent price adjustments after January’s peak. Projections for 2027 and 2028 remain unchanged at $4,800 and $4,250, respectively.
Teves also pointed out that speculative positions have been largely cleared out, while ETF outflows remain limited, creating room for renewed investor demand. Strong inflows into gold ETFs in China and steady domestic physical demand are expected to support imports through the second quarter. UBS believes the market is currently underinvested and sees any dip toward $4,000 as an attractive entry point. The bank also highlighted a structural shift, with more investors—both public and private—treating gold as a long-term strategic asset for diversification and portfolio protection.
For silver, UBS lowered its 2026 forecast to $91.9 per ounce from $105, though it still expects silver to outperform gold during rallies. However, Teves cautioned that silver’s industrial exposure makes it vulnerable to global economic slowdowns, which could weaken demand and sentiment. As a result, the gold-to-silver ratio may struggle to revisit earlier lows and is more likely to bottom in the 50–60 range rather than around 40.
Platinum and palladium face similar challenges from softer industrial demand, although potential supply disruptions—especially if Middle East tensions affect South African mining—could offer some support.
THE ETERNAL SOVEREIGN 