DAX, Gold Forecast: Two trades to watch 90726

DAX Rebounds as AI Optimism Returns Despite Middle East Tensions

The DAX, along with its European peers, is recovering on Thursday after Wednesday's sharp sell-off. A rebound in semiconductor stocks, together with a modest pullback in oil prices, has helped stabilise sentiment, although concerns over shipping through the Strait of Hormuz continue to linger.

European equities fell sharply yesterday after renewed tensions in the Middle East sent oil prices surging, fuelling concerns over inflation and weighing on risk appetite.

President Trump's declaration at the NATO summit that the Iran ceasefire was effectively over raised fears of renewed conflict and further disruption to shipping through the Strait of Hormuz.

However, despite reports of further U.S. strikes overnight, markets have remained relatively resilient today. This suggests investors continue to view the latest escalation as another setback rather than the beginning of a prolonged conflict. Throughout the crisis, market sentiment has repeatedly swung between optimism over diplomacy and fears of escalation, and investors still appear to expect negotiations to resume eventually.

The improvement in sentiment has also been supported by a recovery in AI-related stocks after reports that China could allow domestic AI firms to access Nvidia's H200 chips. The news has helped revive the AI trade after recent profit-taking, although investors remain increasingly selective ahead of earnings season as questions persist over valuations and the pace of returns on AI investment.

The economic calendar is relatively quiet today. Attention will turn to U.S. weekly jobless claims and existing home sales later in the session before German inflation data on Friday.

DAX Forecast – Technical Analysis

The DAX has rallied from the 2026 low of 21,860 to a record high of 25,920 before pulling back sharply towards 25,000.

The index is currently testing support at its rising trendline and the 23.6% Fibonacci retracement of the rally from the 2026 low.

While the price remains above this support zone, the broader uptrend remains intact. Buyers will look for a recovery towards 25,500 before targeting the record high around 25,920.

On the downside, a break below 25,000 would expose the 50-day SMA near 24,750. Below there, attention would turn to the 38.2% Fibonacci retracement around 24,360, which also coincides with the 200-day SMA.

Dip buying and a divided Fed lift gold, but gains could be capped

Gold is edging higher on Thursday as bargain hunters return following three consecutive sessions of declines.

The U.S. dollar has eased modestly after the minutes from the Federal Reserve's June meeting proved slightly less hawkish than some investors had feared. However, renewed tensions between the U.S. and Iran continue to underpin oil prices and inflation expectations, limiting the upside for the non-yielding precious metal.

The minutes revealed a divided Federal Reserve, with policymakers split evenly over whether further tightening would be required. Nine members projected at least one additional rate hike before the end of the year, while the remaining nine expected policy to remain unchanged.

Although the minutes did not materially strengthen the hawkish case, they also offered little support for expectations of rate cuts, leaving markets focused on incoming economic data.

Markets continue to price around a 65% probability of a September rate hike, while renewed geopolitical tensions could keep energy prices elevated and complicate the inflation outlook.

Taken together, that suggests real yields and the U.S. dollar are unlikely to weaken significantly in the near term, limiting the scope for a sustained recovery in gold.

Attention now turns to U.S. weekly initial jobless claims and speeches from several Federal Reserve officials, which could provide further clues over the outlook for monetary policy. Developments in the Middle East will also remain closely watched, with any further rise in oil prices likely to reinforce inflation concerns and weigh on gold.

Gold Forecast – Technical Analysis

Gold broke below its symmetrical triangle pattern and the 200-day SMA before falling to a low near 3,940, its weakest level since October last year.

Although prices have stabilised, gold continues to trade below its falling trendline as well as both the 50-day and 200-day SMAs, leaving the broader technical outlook bearish.

Sellers will look for a break below 3,940 to create a fresh lower low and expose the 3,800 support level.

Any recovery would first need to reclaim 4,100 before bringing 4,200 into focus, where the falling trendline converges with resistance. Above there, 4,370 comes into view, followed by the 50-day SMA near 4,500.