Market Insights > Daily Market Analysis New

Dollar Extends Gains on Inflation Repricing Ahead of NFP

Published: 3 April 2026,06:25

Daily Market Analysis New

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Key Takeaways:

*Dollar strengthens as rising oil prices lift inflation expectations

*Markets focus on upcoming US Nonfarm Payrolls for policy direction

*Strong data could reinforce tightening expectations

*Gold pressured by stronger dollar, but retains underlying support

Market Summary:

The U.S. dollar extended its gains as surging oil prices prompted markets to reprice inflation expectations, amid escalating tensions between the United States and Iran. Higher energy prices have reinforced concerns over supply-driven inflation, supporting expectations that monetary policy may need to remain restrictive.

Investor focus now turns to the upcoming US Nonfarm Payrolls (NFP) report and broader labor market data, which are expected to play a key role in shaping near-term policy expectations. A stronger-than-expected reading could provide the Federal Reserve with greater flexibility to maintain or even tighten its policy stance further, as resilient economic conditions would allow policymakers to combat inflation without significantly undermining growth. However, market participants remain cautious, as the release of key employment data could trigger heightened volatility across the dollar and related assets.

Meanwhile, gold prices initially moved lower, pressured by the stronger dollar and rising oil prices, both of which reduced the appeal of non-yielding assets. The increase in inflation expectations has driven Treasury yields higher, raising the opportunity cost of holding gold and prompting short-term selling pressure.

Despite the pullback, gold managed to stage a modest rebound, continuing to trade within a broader upward channel. In the near term, geopolitical tensions may not fully translate into stronger gold demand, as investors prioritize the dollar amid expectations of higher interest rates.

However, from a longer-term perspective, persistent geopolitical uncertainty and supply-driven inflation risks could elevate concerns over stagflation — a combination of rising prices and slowing growth. Such an environment would likely reinforce gold’s role as a hedge against economic instability, providing underlying support to the metal.

Overall, markets remain caught between short-term monetary tightening dynamics favoring the dollar and longer-term macro risks that continue to underpin gold demand.

Technical Analysis

DOLLAR_INDX, H4

The dollar index is trading higher after rebounding from the ascending trendline and breaking above 99.70, confirming a short-term bullish structure.

Momentum indicators remain supportive, with the MACD strengthening and the RSI at 53 above the midline, suggesting continued upside potential.

If bullish momentum persists, the index could extend gains toward the next resistance at 100.45, with further upside toward 101.25.

However, if momentum weakens, a technical pullback may occur, with prices likely to retest 99.70 as support.

Resistance Levels: 100.45, 101.25

Support Levels: 99.70, 99.10

XAUUSD, H4

Gold prices are trading higher after rebounding from both horizontal support and the ascending channel, maintaining a bullish structure.

Momentum is improving, with the MACD showing diminishing bearish pressure and the RSI at 56 above the midline, indicating sustained buying interest.

If bullish momentum continues, gold could extend gains toward the 4,800.00 resistance level, with further upside toward 4,970.00.

However, if momentum fades, prices may retrace toward the 4,600.00 support level, which remains key to holding the current uptrend.

Resistance Levels: 4800.00, 4970.00

Support Levels: 4600.00, 4350.00

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