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Published: 29 May 2026,07:28
Daily Market Analysis New
*Potential U.S.–Iran agreement reduces supply disruption fears
*Oil prices decline as hopes for reopening the Strait of Hormuz increase
*Falling Treasury yields pressure the US dollar despite strong inflation data
The US dollar index, which tracks the greenback against a basket of six major currencies, retreated after reports emerged that the United States and Iran may be close to reaching a tentative agreement to reopen the Strait of Hormuz and resume discussions surrounding Iran’s nuclear program. According to U.S. officials, negotiations have made significant progress, although the proposal still requires final approval from Donald Trump and Iranian authorities have yet to publicly comment on the potential agreement.
The prospect of easing tensions between Washington and Tehran has helped reduce concerns over prolonged supply disruptions in global energy markets. As a result, crude oil prices continued to decline, easing inflation fears and pushing U.S. Treasury yields lower. The decline in yields subsequently weighed on the dollar, causing it to pull back from recent highs.
Despite the weaker dollar, recent U.S. inflation data remained supportive of a relatively hawkish policy outlook. According to data from the U.S. Commerce Department, the Core PCE Price Index rose 3.3% year-over-year in April, accelerating from 3.2% previously and marking the fastest annual increase since November 2023. On a monthly basis, Core PCE increased by 0.2%, following a 0.3% rise in March.
The stronger inflation figures suggest that price pressures remain elevated, largely driven by higher energy costs, and could continue supporting expectations that the Federal Reserve may maintain a restrictive monetary policy stance. As a result, while the dollar retreated on improving geopolitical sentiment, losses remained limited due to the underlying support from inflation data.
Gold prices, meanwhile, rebounded modestly as the weaker dollar and lower Treasury yields improved demand for the precious metal. The recovery was primarily driven by expectations that a potential U.S.–Iran agreement could reduce inflation pressures and lower expectations for further aggressive monetary tightening.
However, the broader outlook for gold remains mixed. While easing geopolitical tensions and a softer dollar have supported short-term gains, the latest inflation data continues to suggest that interest rates may remain elevated for longer. This could limit upside potential for gold in the longer term, particularly if inflation remains persistent and the Federal Reserve maintains its hawkish stance.
Overall, markets remain focused on the final outcome of U.S.–Iran negotiations, with any confirmation or setback likely to have a significant impact on oil prices, Treasury yields, the dollar, and gold in the coming sessions.
Gold, H4:
Gold prices are trading higher after a breakout above the 4,455.00 resistance level, reinforcing a bullish short-term structure.
Momentum remains supportive, with the MACD strengthening to the upside and the RSI at 53 above the midline, indicating sustained buying interest and further upside potential.
If bullish momentum persists, gold could extend gains toward the next resistance at 4,580.00, with further upside toward 4,665.00 if momentum strengthens.
However, if buying pressure begins to fade, prices may retrace toward the 4,455.00 support level, which now acts as a key near-term floor.
Resistance Levels: 4580.00, 4665.00
Support Levels: 4455.00, 4370.00
DOLLAR_INDX, H4:
The dollar index is trading lower after retreating from the 99.50 resistance level, and is currently consolidating near the 98.90 support level.
Momentum remains tilted to the downside, with the MACD strengthening in bearish territory and the RSI at 45 below the midline, suggesting downside pressure may persist.
A confirmed break below 98.90 could extend losses toward the next support at 98.45, reinforcing the bearish bias.
However, if the support level holds, the index may rebound and retest the 99.50 resistance level, with further upside toward 100.10 if momentum recovers.
Resistance Levels: 99.50, 100.10
Support Levels: 98.90, 98.45
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