Market Insights > Daily Market Analysis New

Dollar Holds Firm as Middle East Tensions and Hawkish Fed Weigh on Gold

Published: 14 July 2026,08:43

Daily Market Analysis New

Tags:

Share on:

Table of Contents show

Key Takeaways:

*The US dollar remains supported by safe-haven demand as US-Iran tensions escalate.

*Higher oil prices are fuelling inflation concerns, reinforcing expectations of a more hawkish Fed.

*Fed Governor Waller signalled rates may need to rise if inflation remains above target.

Market Summary:

The US dollar remained supported near the 101 level as escalating geopolitical tensions in the Middle East continued to drive safe-haven demand. Market sentiment deteriorated after the United States carried out a third consecutive night of strikes against Iranian military targets, while President Donald Trump announced the reinstatement of a naval blockade on Iran and said the US would ensure the Strait of Hormuz remained open through military protection. The renewed conflict prompted investors to rotate into defensive assets, while sharply higher oil prices also reinforced the dollar by raising concerns that inflationary pressures could remain elevated for longer.

The stronger dollar was further supported by increasingly hawkish Federal Reserve expectations. Fed Governor Christopher Waller stated that interest rates may need to rise “in the near term” should inflation remain well above the Fed’s 2% target. Markets are now pricing in around 30 basis points of additional tightening this year, while some strategists noted that a June Core CPI reading of 0.3% or higher could significantly increase the probability of another rate hike as early as the July meeting. Investors are therefore focusing on this week’s US CPI and PPI releases, along with Fed Chair Kevin Warsh’s first semiannual testimony before Congress, for further guidance on the policy outlook.

Despite the heightened geopolitical uncertainty, gold came under heavy selling pressure and briefly fell below the key $4,000 per ounce psychological level after posting its biggest one-day decline in more than a month. Instead of benefiting from safe-haven demand, bullion was weighed down by the combination of a stronger US dollar, rising Treasury yields and renewed expectations that higher oil prices could keep inflation elevated and force the Federal Reserve to maintain a tighter monetary policy. As a non-yielding asset, gold tends to lose its appeal when interest rates and bond yields rise.

Looking ahead, gold is likely to remain highly sensitive to both geopolitical developments and US economic data. Any further escalation in the US-Iran conflict or prolonged disruptions in the Strait of Hormuz could revive safe-haven buying. However, stronger-than-expected inflation data and continued hawkish signals from the Federal Reserve would likely keep the dollar and Treasury yields elevated, limiting gold’s upside. Conversely, softer inflation data could weaken the dollar, ease yields and provide support for a rebound in bullion prices.

Technical Analysis

Candlestick chart of a price uptrend with blue support/resistance lines and an orange rising trend line, plus RSI and MACD indicators below. Current price around 101.

Dollar Index, H4:

The US Dollar Index (DXY) continues to trade within a constructive medium-term uptrend, holding comfortably above its rising trendline despite several failed attempts to establish a decisive breakout above the 101.10 resistance level. The recent price action reflects a period of consolidation following the strong rally from the 99.50 region, with buyers continuing to defend higher lows while gradually rebuilding bullish momentum.

Momentum indicators have improved compared with the previous assessment. The Relative Strength Index (RSI) has recovered to around 57, moving back above its signal line and remaining comfortably above the neutral 50 level, indicating that buying momentum is strengthening without entering overbought territory. Meanwhile, the Moving Average Convergence Divergence (MACD) has produced a fresh bullish crossover above the zero line, accompanied by an expanding positive histogram. This suggests that upside momentum is rebuilding and supports the possibility of another attempt to challenge resistance. Overall, the technical outlook remains moderately bullish.

Resistance Levels: 101.10, 101.85

Support Levels: 100.10, 99.50

Price chart showing a downtrend with an orange descending resistance line crossing around 4,100; horizontal support near 3,974 and 3,933; current price approx 4,013 within a green box indicating recent consolidation exactly above support. RSI and MACD indicators shown below, with momentum near oversold/neutral.

Gold, H4:

Gold remains under medium-term bearish pressure, continuing to trade below the descending trendline that has capped prices since late June. The recent decline found support around the 3,974–3,993 demand zone, where buyers have stepped in to prevent a deeper sell-off. While the latest rebound has improved short-term sentiment, the broader trend remains neutral-to-bearish until price reclaims key resistance levels.

Momentum indicators suggest that selling pressure is beginning to ease. The Relative Strength Index (RSI) has rebounded to around 37, moving above its signal line after recovering from oversold conditions. Although momentum has improved, the RSI remains below the neutral 50 level, indicating that bullish momentum has yet to fully develop. Meanwhile, the Moving Average Convergence Divergence (MACD) is showing early signs of recovery, with the histogram turning positive and the MACD line attempting to cross above the signal line. This points to weakening downside momentum and increases the probability of a short-term corrective rebound. Overall, the technical outlook remains cautiously bearish with improving short-term momentum.

Resistance Levels: 4125.00, 4205.00

Support Levels: 4030.00, 3955.00

Start trading with an edge today

Trade forex, indices, metal, and more at industry-low spreads and lightning-fast execution.

Start trading with deposits as low as $50 on our standard accounts.
Get access to 24/7 support.
Access hundreds of instruments, free educational tools, and some of the best promotions around.

Join Now

Latest Posts

Oil Surges as US-Iran Escalation Renews Supply Disruption Fears

Loonie Eyes Hawkish Signals as BoC Holds Firm Amid Resilient Data

Fast And Easy Account Opening

Create account

1

Register

Sign up for a PU Prime Live Account with our hassle-free process.
2

Fund

Effortlessly fund your account with a wide range of channels and accepted currencies.
3

Start Trading

Access hundreds of instruments under market-leading trading conditions.

Create account

Risk Warning: Trading Contracts for Difference (CFDs) involves a high level of risk and may not be suitable for all traders. The use of leverage magnifies both potential profits and losses, meaning you could incur losses greater than your initial deposit. It is important to understand the risks involved and assess whether you can afford to lose your invested capital. When trading CFDs, you do not own the underlying assets and have no rights to them. Past performance is not indicative of future results. The information provided on this website is for general informational purposes only and does not constitute investment advice, recommendation, or solicitation to engage in any investment activities. It does not take into account your personal financial circumstances, investment objectives, or risk tolerance. Any interaction with this website is an individual and voluntary action on the part of the user. The content on this website should not be construed as an invitation to enter into or acquire PU Prime’s financial services and products. Under no circumstances shall the Company be held liable for any loss or damage, in whole or in part, arising from, or in connection with, any CFD trading activities. Please review the legal documents available on our website to ensure that you fully understand the risks associated with CFD trading. If necessary, seek independent advice from qualified professionals.

Regional Restrictions: This information on this website is not intended for distribution to, or use by, any person or entity who is a citizen or resident of certain jurisdictions, including, but not limited to, the United States, China, India, the Philippines, Singapore, North Korea, Cuba, Iran and jurisdictions listed on the FATF “blacklist”, and the major global sanctions lists. It is also not intended for distribution or use in any jurisdiction where such distribution or use would violate local laws or regulations.

PU Prime is a trading name for multiple entities operating across various jurisdictions. These following entities are authorised to operate under the PU Prime brand and trademarks.

PU Prime Trading Pty Ltd is an Australian financial services licensee authorised and regulated by the Australian Securities and Investments Commission of Australia under License No. 410681, with its registered address at Suite 103, Level 1, 17 Castlereagh St, Sydney, NSW 2000, Australia. For Australian clients who have onboarded through https://www.puprime.au, the product issuer is PU Prime Trading Pty Ltd.

PU Prime Financial Services LLC is licensed by the UAE Capital Market Authority (CMA) under License No. 20200000388 (Fifth Category: Arrangement and Advice) to conduct introduction and promotion of financial services and financial products. The company’s registered address is The Prime Tower, Office No. 1209, Business Bay, Plot No. 68-0, Makani No. 25836 86879, Dubai, United Arab Emirates.

PU Prime Ltd is an investment dealer authorised and regulated by the Financial Services Commission of Mauritius under License No. GB23202672, with registered address at Suite 201 Level 2, The Catalyst, Cybercity Ebene, Mauritius.

PU Prime Limited is regulated by the Financial Services Authority (FSA) of Seychelles, with License No. SD050 and Registration No. 8426654-1. Its registered office is located at CT House, Office 9A, Providence, Mahe, Seychelles.

PU Prime (Pty) Ltd is a licensed Financial Services Provider (FSP No. 52218) authorised and regulated by the Financial Sector Conduct Authority ("FSCA") of South Africa. PU Prime (Pty) Ltd is neither the issuer nor the market maker of the derivative products made available through the FSP. It acts solely as an intermediary, as contemplated in the Financial Advisory and Intermediary Services Act, 2002 ("FAIS Act"), between clients and PU Prime Ltd (the "Product Provider"), and its services are limited to the provision of intermediary services in relation to derivative products issued by the Product Provider. Accordingly, PU Prime (Pty) Ltd does not act as principal, issuer, market maker or counterparty in any client transaction. Registered Office: 18 Cavendish Road, Claremont, Cape Town, Western Cape 7708, South Africa.

PU Prime Ltd, incorporated in the Republic of Seychelles, is a securities dealer authorised and regulated by the Financial Services Authority of Seychelles under License No. SD050, with its registered address at CT House, Office 9A, Providence, Mahe, Seychelles.

PU Prime Limited, incorporated in the Republic of Seychelles, is a securities dealer authorised and regulated by the Financial Services Authority of Seychelles under License No. SD050, with its registered address at CT House, Office 9A, Providence, Mahe, Seychelles.

PU Prime (CY) Limited is registered in the Republic of Cyprus under registration number HE414308. Its registered office is located at Archiepiskopou Makariou III, 160-1st floor, 3026, Limassol, Cyprus. PU Prime (CY) Limited facilitates services for the licensed and regulated entities within the PU Prime Organizational Structure, including but not limited to payment services. These services do not involve the use of any trading terminals.

Search

Popular Search