Gold at Record Highs as Dollar Hits Three-Year Low
With markets on edge over trade tensions and economic uncertainty, Razan Hilal, FOREX.com Market Analyst provides a technical outlook across major asset classes.
Key Takeaways
- The US dollar is pressured at multi-year lows, with risk of further declines
- Gold faces critical resistance but is buoyed by strong safe haven demand
- US equities hover just below resistance, awaiting clearer signals
Dollar at Multi-Year Lows
The US dollar is under pressure, trading below the 100 mark and nearing critical support zones between 99 and 98. According to Hilal, a break below these levels could open the door to a fall toward 96 or even 94, marking a test of a channel stretching back to the 2008 lows. However, she noted that for now, the dollar remains “pressured” but steady, its movement still heavily influenced by trade relations between the US and China.
Safe Haven Demand Lifts Gold
Gold has surged past the 3,300 mark, a level Hilal ties to a long-term trendline connecting highs from 2000, 2016, and 2020. Although the metal is “extremely heated” across multiple timeframes, safe haven demand could continue to push prices higher, especially if market turbulence persists. Potential breakout targets include 3,350 and even 3,400. However, Hilal warns that a pullback remains possible due to overbought conditions.
Oil Finds Support and Rebounds
Oil prices have rebounded sharply from the $55 level—a point Hilal describes as the “golden Fibonacci” of the uptrend from 2020 to 2022. While currently facing some weakness near the $60 mark, due to OPEC’s downgraded outlook, Hilal sees potential for a continued recovery if a US-China trade agreement is reached. The correlation between oil and equities remains strong, suggesting further upside if positive momentum in US markets holds.
Equities Await a Clear Signal
US equity indices including the Dow, S&P 500, and Nasdaq are all testing key resistance zones: 19,200 for the Nasdaq, 41,000 for the Dow, and 5,500 for the S&P 500. Hilal points out that market optimism is tempered by geopolitical developments, including new restrictions on US tech exports to China. A decisive break higher would require “positive economic indicators” and progress in trade talks. Otherwise, equities risk falling back into neutral or negative territory.
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---- Written by Gus Farrow
---- Expert: Razan Hilal, CMT, FOREX.com Market Analyst
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