Dow Jones Forecast: DJIA unchanged as metals rout continues

US futures                                            

Dow futures 0.00%, S&P futures -0.33%  & Nasdaq futures -0.57%

In Europe                                                                           

FTSE 1.09% & DAX 0.95%

• Gold & Silver extend Friday’s selloff
• Heightened volatility in safe havens rattles investors
• US ISM manufacturing starts a busy week
• Oil drops 5% as US-Iran tensions ease

Gold & Silver slump rattles risk sentiment

U.S. stocks are subdued at the start of the week after sharp declines in gold and silver prices weighed on investor confidence ahead of a packed week of corporate earnings and economic data.

Gold and silver prices are slumping further on Monday, rattling the global market, amid a nervous start to the new month. Kevin Warsh's nomination as the next Fed chair, a stronger U.S. dollar, momentum trading, and the cooling of U.S.-Iran geopolitical tensions all fuelled volatility.

Gold and silver fell sharply, with gold trading $800.00 an ounce lower from its record high last week at $5600. Silver is down 35% in just two sessions.

The high volatility in these supposed safe havens is rattling the broader market and hurting demand for risk assets. The VIX, often considered the fear gauge for Wall Street, is rising toward the 20 level, which is often seen as signalling heightened tensions.

The S&P 500 and the Nasdaq are set to open 0.5% lower. Thhe defensive make-up of the Dow is helping index futures trade near the flatline

Looking ahead, this week is a busy one, with around a quarter of S&P 500 firms set to report strong earnings growth. This is currently running about 11% higher than last year and above consensus at 7%. Attention will be on Alphabet and AMD, particularly on capital expenditure and the benefits of AI, following Microsoft's disappointment last week.

This week, the US economic calendar is also busy. Monday kicks off with the January ISM manufacturing index, but the main event will be Friday's nonfarm payrolls report.

Corporate news

Oracle is rising 1.8% after the software company said it expects to raise between $45 billion to $50 billion this year to build additional capacity for its cloud infrastructure.

Disney is rising over 1.5% after the entertainment giant's theme parks and cruises helped it beat revenue and earnings forecasts for the holiday quarter.

NVIDIA is falling 1.2% after the Wall Street Journal reported that the chipmaker's plans to invest up to $100 billion in OpenAI to help it train and run its latest AI models have stalled

Gold miners such as Newmont and Barrick are falling, driven by a sharp decline in precious metals prices following Trump's nomination of Kevin Walsh as the new Fed chair.

Dow Jones forecast – technical analysis.

The Dow Jones has eased back from the record high of 49,680, slipping lower, but still holding above the 50 SMA and the rising trendline ansd within a familiar range. Sellers would need to break below the 50 SMA at 48,365 and the January 21 low to create a lower low. Below here attention turns to 47,890. Buyrs will look to rise above 49,680 to create a higher high and a new record high.

FX markets – USD rises, EUR/USD falls

The USD is rising, extending gains from last week following the announcement of Kevin Warsh as the next Federal Reserve Chair. This week is a key week for US economic data, which could drive USD volatility.

EUR/USD is showing signs of stabilising above 1.1850 after heavy losses at the end of last week. The pair remains vulnerable to further declines amid U.S. dollar strength. Eurozone inflation data is due this week, followed by the ECB rate decision on Thursday, where the central bank is expected to leave rates unchanged at 2%.

GBP/USD is heading lower on USD strength as attention turns to this week's BoE rate decision. The central bank is likely to leave interest rates unchanged at 3.75%, near the estimated neutral rate of 3.25 to 3.5%.

Oil drops 5% as US-Iran tensions ease

Oil prices are falling sharply on Monday, dropping 5% after a 6% rally last week, as geopolitical tensions remain firmly in focus.

Oil prices are falling after President Trump said the US and Iran were seriously talking, signalling a de-escalation of tensions between Washington and the 4th largest OPEC producing country.

The de-escalation of tensions means the risk premium on oil is fading. The comes after Trump had repeatedly threatened Iran with intervention if it did not agree to a nuclear deal. Those threats had pushed oil prices to multi-month highs.

The slumping oil price is also being driven by a broader commodities sell-off, with deep losses in gold and silver amid a rebounding U.S. dollar. A stronger USD makes USD-denominated commodities more expensive for buyers with foreign currencies.

Over the weekend, OPEC+ agreed to keep its oil output unchanged for March, in line with expectations and amid expectations of a supply glut this year.