Dollar Steady, Oil Slides, Gold Rebounds

The US Dollar Index is slightly lower in early Asian trading, near 97.50 (-0.15%), after rising in the last two sessions. However, the short-term outlook is positive, supported by high US Treasury yields. The 10-year yield is steady at around 4.28% after a strong move up in the previous session. Moreover, the DXY has recovered from its July and September lows near 96.37, lending a more constructive tone and reinforcing the near-term rebound.
The US dollar continues to receive support from indicators of economic resilience. Recent data showed manufacturing activity bounced back, with the ISM Manufacturing PMI rising to 52.6, beating expectations and moving back into the expansionary territory.
Market sentiment for the dollar has improved after President Trump nominated Kevin Warsh as the next Fed Chair, which many see as a sign of a more disciplined monetary policy. Safe-haven demand is steady as precious metals remain volatile. The euro is still under pressure, held back by the strong dollar and expectations that the ECB will keep policy on hold. The Japanese yen is weakening amidst fiscal worries ahead of elections and talk of allowing a weaker currency, which reduces the likelihood of intervention.
Overall, better economic data and strong yields suggest the US Dollar Index has a slightly bullish outlook for the day and any dips may attract buyers. On the charts, DXY could find support near the last session's low at 97.031, with resistance at the 20-day SMA at 98.111. For EURUSD, resistance is at the 9-day SMA at 1.187 and support is at 1.175.
Crude Oil
Brent crude fell towards $65.74 per barrel on Tuesday, and WTI fell towards $61.60 per barrel, with both contracts under pressure amidst easing geopolitical tensions and signs of an oversupplied market.
Risk sentiment improved yesterday after the US and Iran confirmed the resumption of nuclear-related talks, lowering fears of supply disruption. Meanwhile, OPEC+ reiterated its commitment to keeping output steady through March, supporting expectations that supply will remain abundant while seasonal demand is still weak. With the geopolitical risk premium having disappeared, investors have refocused on fundamentals, which currently indicate excess barrels in the market and a deterioration in macroeconomic sentiment.
On a related note, the Brent–WTI spread has decreased to $4.10, but it is still above the historical mean of 3.488. Since seaborne benchmarks shed more of the war premium than WTI, the spread has narrowed from late January highs of $5.48, as Brent shed more.
Technically, Brent is consolidating losses after a 4.9% drop from the $70.50 resistance level following US–Iranian diplomatic de-escalation. It is trading near $65.74, with technical supports at $64.78 and $63.99 and resistance at $66.57 and $67.55.
WTI is searching for a short-term bottom near $61.63 following a nearly 5% pullback. It faces resistance at $62.63 and at the previous high, with support at $60.61
Gold and Silver.
Gold rose on Tuesday, gaining back some losses after the abrupt unwinding of a record-breaking rally that had driven prices down 13% in just two days. Silver also advanced.
Spot gold climbed as much as 5% after falling 4.8% in the previous session to extend a slump on Friday that was the steepest in more than a decade. Silver rose as much as 9%, clearing the $85 level and erasing the previous day’s loss.
Gold’s 3-day plunge was very much a correction waiting to happen, but the fundamental drivers for its multi-year advance still remain strong. Given the unlikelihood of a rapid tightening cycle of monetary policy globally and lingering geopolitical concerns, higher prices for precious metals look likely.
Silver investors will want to see a stop in ETF outflows before deciding if it is safe to enter again. An important observation is that while prices rocketed higher in January, ETF holdings actually shrank that month. The mismatch was one of the factors (along with others, including lofty RSI readings) that had flagged a correction was incoming. Silver-backed ETF holdings shrank by 168 tonnes on Monday, the least since mid-November. That was the eighth day of net outflows. While there are other important sources of demand for silver — including industrial users, as well as China-based traders — the ETF flows are key for setting prices. And right now, the flows need to stabilise for the white metal to stage a sustained rebound.
From a technical perspective, gold is still trading below the 9 SMA on the daily chart. However, it has recaptured the 21 SMA and RSI has bounced to 46, indicating some buying momentum. On the 4-hour chart, immediate resistance is at $5,000 level (50 SMA), followed by $5,158 which coincides with the 0.618 Fibonacci level. Immediate support is $4,666 followed by the 2nd Feb 2026 low of $4,402.
Silver is still trading below the 9 SMA on the daily chart and has an RSI of 36, indicating that buying momentum is recovering but slowly as investors are still cautious. On the 4-hour chart, resistance is at $93 (100 SMA) and then at $100.5 (50 SMA level). A break above this level can solidify bullish momentum on silver. Immediate support is at 2nd Feb 2026 low of $71.2, followed by $64 and then $57.

Vijay Valecha

 Chief Investment Officer, Century Financial