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Published: 12 May 2026,05:12
Daily Market Analysis New
*US dollar rebounds as rising oil prices fuel inflation concerns
*Strong economic data and higher Treasury yields support USD
*Gold extends gains despite tightening policy expectations
*U.S.–Iran tensions and upcoming U.S.–China talks boost safe-haven demand
The US dollar index, which tracks the greenback against a basket of six major currencies, rebounded slightly as rising oil prices reignited inflation concerns and pushed U.S. Treasury yields higher.
Recent U.S. economic data, including the latest Nonfarm Payrolls report, have generally pointed to continued economic resilience. The stronger data has reinforced confidence in the U.S. economy and supported expectations that the Federal Reserve may need to maintain a relatively firm monetary policy stance.
However, the broader outlook remains complicated by escalating geopolitical tensions. The breakdown in U.S.–Iran negotiations and increasing risks of renewed military conflict have created uncertainty over the economic outlook, particularly through the energy and inflation channels. In addition, upcoming discussions between the United States and China later this week are expected to become another major market focus, potentially adding further volatility across asset classes.
Gold prices unexpectedly extended their gains despite the stronger dollar and rising rate expectations. Markets appear increasingly focused on long-term geopolitical uncertainty rather than short-term monetary policy pressures.
The failure of negotiations and renewed threats of military action between the United States and Iran have strengthened gold’s role as a strategic safe-haven asset. Investors appear to be looking beyond temporary fluctuations in oil prices and instead positioning for broader uncertainty surrounding the geopolitical and economic outlook.
In addition, upcoming U.S.–China discussions could further increase market volatility and support demand for defensive assets such as gold.
While rising oil prices and inflation risks would normally increase expectations for tighter monetary policy — a traditional headwind for non-yielding assets — persistent geopolitical instability is currently offsetting those pressures and helping gold maintain upward momentum.
Overall, both the US dollar and gold are being supported simultaneously, though by different drivers: the dollar through higher yields and economic resilience, and gold through elevated geopolitical uncertainty and long-term safe-haven demand.rising yields continuing to act as a major headwind for the safe-haven asset in the near term.
Technical Analysis
Gold prices are trading higher, currently testing the 4,765.00 resistance level, which acts as a key near-term breakout zone.
However, momentum indicators are showing signs of slowing upside pressure. The MACD is losing bullish strength, while the RSI at 61 is easing from overbought territory, suggesting a potential near-term technical correction.
Failure to break above 4,765.00 could trigger a pullback toward the 4,725.00 support level, with further downside toward 4,685.00 if selling pressure intensifies.
Conversely, a confirmed breakout above 4,765.00 could extend gains toward the next resistance at 4,800.00, reinforcing bullish continuation.
Resistance Levels: 4765.00, 4800.00
Support Levels: 4725.00, 4685.00
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