Gold Eyes Records, Oil Rallies on Fed Rate and Geopolitical Risks

Key Events to Watch

• Trump’s energy sanction threats, Fed rate cut bets, and renewed Middle East tensions are driving bullish momentum in WTI, gold, silver, and possibly the U.S. dollar.
• Gold breaks the $3,500 record, reigniting bullish forecasts toward $4,000.
• U.S. Nonfarm Payrolls (NFP) on Friday is a major focus for dollar direction and market volatility

Market Sentiment Shifts Ahead of NFP

While headlines highlight Fed rate cut risks, broader market sentiment has turned decisively risk-off. U.S. indices have pulled back, while safe havens like silver and gold have surged to new highs — with silver climbing above $40.40 and gold breaking past $3,500. This reflects a defensive market tone ahead of Friday’s NFP report.

The retreat in risk appetite is largely fueled by Trump’s tariff rhetoric, which raises the specter of renewed energy sanctions, supply chain disruptions, and inflation risks. Geopolitical anxiety is also resurfacing, particularly with mounting tension between Israel and Iranian proxies.

Global Trade Risks and Energy Sanctions

Meanwhile, the ongoing Russia–Ukraine ceasefire process continues to weigh on U.S. strategy, as sanctions on Russian oil are creating discounted supply chains benefiting major competitors like India and China. These lower costs enhance their manufacturing competitiveness, possibly allowing them to bypass U.S. tariffs and deepen alternative trade ties, adding pressure to oil prices as global trade friction intensifies.

Crude oil is currently supported by a combination of energy sanctions, geopolitical tensions, and rate cut expectations — with price action eyeing the $70 barrier as long as it holds above $65.20.

Gold Holds Bullish Structure

Conversely, gold remains well-positioned for a breakout above $3,540. If confirmed, this could open the door to a move toward the $4,000 mark, driven by overall risk aversion and safe-haven demand.

Dollar Consolidates Above Key Support

The U.S. dollar, meanwhile, is holding near the 98 handle — still supported above the 17-year and 96-level trend support. This stability poses downside risk for major currency pairs and could cap further haven rallies unless geopolitical risks return to dominate headlines.

Technical Analysis: Quantifying Uncertainties

Crude Oil Weekly Outlook: Daily Time Frame – Log Scale

 

Source: Tradingview

Crude oil has maintained its rebound above the 61.80–62.00 support zone — aligning with the neckline of the previous inverted head and shoulders formation — and has broken above the 65 resistance level, signaling a potential continuation of bullish momentum. Daily RSI has also moved above the neutral 50 level, further confirming upside momentum.

• A clean hold above 65.20 may extend the rally toward 68.00, 69.40, and 70.40 — the next major resistance levels.
• On the downside, 62.00 and 61.80 remain key support levels. A break below them could expose oil to deeper losses toward 59.40 and 57.90.

Gold Outlook: Daily Time Frame – Log Scale

Source: Tradingview

Gold is approaching breakout confirmation toward new all-time highs, with daily RSI signaling overbought conditions. However, price action remains near a critical resistance zone needing further confirmation for a breakout; and, in times of heightened uncertainty, momentum indicators rarely constrain gold’s bullish potential.

• A clean hold above 3500 and 3,540 would confirm further upside toward 3,780 — the projected height of the 5-month consolidation — and potentially $4,000.
• On the downside, pullback risks may find support at 3,430, 3,410, and 3,360 before threatening a deeper reversal toward 3,260 or lower.

Written by Razan Hilal, CMT

Follow on X:@Rh_waves