Market Overview

The U.S. dollar index continued its strong momentum on Friday, gaining 0.25% to close at 99.70, marking its best monthly performance since July. This surge followed multiple Federal Reserve officials voicing opposition to rate cuts in December, reinforcing expectations of prolonged policy tightening. The 10-year Treasury yield ended at 4.079%, while the 2-year yield—a key indicator of rate expectations—closed at 3.582%, underscoring ongoing market caution.

Gold extended its retracement last week, touching a two-week low of $3,886 before rebounding sharply on Thursday. Although prices slipped by 0.5% on Friday to $4,002.94 per ounce, gold still logged a 3.7% monthly gain, its third consecutive monthly increase.
Despite hawkish Fed comments pressuring bullion, market sentiment remained mixed amid U.S. government shutdown risks and geopolitical uncertainty, which provided underlying support for safe-haven assets.

Oil prices experienced whiplash on Friday after reports of a potential U.S. airstrike on Venezuela sent WTI crude briefly above $61, only for prices to retreat following President Trump’s denial. WTI settled up 0.96% at $60.66, while Brent crude rose 0.88% to $64.47 per barrel.

Global Market Highlights

• USD Index: Strongest monthly performance since July; resistance near 100.00, support at 99.40.

• EUR/USD: Slipped toward 1.1500, pressured by ECB’s steady stance and strong USD demand.

• GBP/USD: Fell to multi-month lows as fiscal uncertainty weighed on sentiment.

• JPY: Remained weak as BoJ’s cautious tone disappointed markets, though long-term support seen from wage growth and policy normalization hopes.

• OPEC+: Confirmed a 137,000 bpd December output increase, followed by a Q1 production pause to manage surplus risks.

• Commodities: Brent and WTI both fell around 2.6% in October, their third monthly loss.

Gold and Commodities Analysis

Gold faced renewed selling pressure as Fed officials adopted a hawkish stance. Cleveland Fed President Loretta Mester reiterated her opposition to last week’s rate cut, emphasizing the need for restrictive policy to curb inflation.
The U.S. dollar’s resilience around 3-month highs made dollar-priced gold less attractive for foreign buyers, though long-term prospects remain bullish. Morgan Stanley projects average gold prices to reach $4,300/oz by mid-2026, citing rate-cut expectations, central-bank demand, and persistent macro uncertainty.

Other precious metals followed gold lower:

• Silver: Down 0.7% to $48.58/oz

• Platinum: Down 1.7% to $1,582.89/oz

• Palladium: Down 0.2% to $1,442.01/oz

Technical Outlook

U.S. Dollar Index (DXY):

• Resistance: 99.90 – 100.10

• Support: 99.50 – 99.30

• Bias: Bullish above 99.50; potential breakout if sustained above 100.00

EUR/USD:

• Resistance: 1.1560 – 1.1600

• Support: 1.1500 – 1.1485

• Bias: Bearish unless reclaiming 1.1580

Gold (XAU/USD):

• Resistance: 4,040 – 4,080

• Support: 3,966 – 3,933

• Bias: Neutral to bullish above $3,966; correction possible if $3,900 breaks

Market Outlook

CWG analysts maintain a buy-on-dip approach for USD, targeting 99.95–100.10, with intraday stop-losses below 99.50.
Gold remains supported above $3,966 with potential upside toward $4,080 if momentum resumes.
Caution is advised as volatility may increase ahead of this week’s RBA rate decision and U.S. labor data.