Market Insights > Daily Market Analysis

6 August 2025,06:36

Daily Market Analysis

Dollar Trades Sideways as Tariff Uncertainty Weighs; Gold Rises on Safe-Haven Demand

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6 August 2025, 06:36

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Key Takeaways:

*Trump’s renewed tariff threats against India over Russian oil imports have intensified market concerns, keeping the dollar range-bound and Wall Street under pressure.

*Escalating trade uncertainty and a softer greenback lifted gold to a two-week high above $3,390.

Market Summary:

The U.S. dollar remained range-bound while Wall Street gave back part of Monday’s gains in the latest session, as markets weighed the escalating trade tensions driven by President Donald Trump’s latest tariff threats. Trump continued to pressure India over its energy ties with Russia, condemning its ongoing purchases of Russian oil amid the prolonged Ukraine conflict. The White House has now threatened to raise tariffs on Indian imports beyond the already-announced 25%, intensifying geopolitical uncertainty.

While official responses from both India and Russia remain absent, markets are increasingly concerned about potential retaliatory actions, adding to risk-off sentiment. The dollar has yet to recover from last Friday’s sharp decline following a weaker-than-expected Nonfarm Payrolls report, while mixed U.S. PMI data released yesterday offered little direction for traders.

Gold, meanwhile, benefited from the growing geopolitical tensions and a softer greenback. The safe-haven metal climbed to its highest level in two weeks, breaching the $3,390 mark as risk sentiment deteriorated.

Looking ahead, market participants will closely monitor speeches from Federal Reserve officials for clues on the central bank’s next move in September. Attention will also turn to the U.S. long-term Treasury auction, with yields likely to influence the dollar’s near-term trajectory.

Technical Analysis

DXY, H4:

The U.S. dollar index remains range-bound following a sharp selloff last Friday that left the greenback trading without clear direction. Despite the pullback, the index has managed to hold above the 50% Fibonacci retracement level at $98.70, signaling that the broader long-term bullish structure may still be intact.

However, technical indicators point to growing downside pressure. The Relative Strength Index (RSI) has slipped below the midpoint, indicating a shift toward bearish sentiment. Meanwhile, the MACD is approaching a break below the zero line, reinforcing the view that the recent bullish momentum has faded.

Should the index fail to reclaim upward traction, further weakness may be expected in the near term.

Resistance level: 99.10, 99.60

Support level: 98.70, 97.85

XAUUSD, H4:

Gold extended its upward trajectory in the last session, climbing to a two-week high and reinforcing a bullish bias for the precious metal. The technical breakout above the 68.2% Fibonacci retracement level confirms a reversal from the previously entrenched bearish structure, signaling renewed buying interest.

Momentum indicators support the bullish outlook. A golden cross has formed, with the 20-day simple moving average crossing above the 50-day SMA—often viewed as a signal of sustained upward momentum. Meanwhile, the RSI continues to hover near overbought territory, and the MACD remains in positive territory after breaking above the zero line, further reinforcing the bullish momentum.

That said, as momentum begins to moderate, a near-term technical pullback cannot be ruled out. Still, the broader structure suggests buyers remain in control—at least for now.

Resistance level: 3410.00, 3456.00

Support level: 3353.00, 3303.00

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Disclaimer

This content is for educational and informational purposes only and should not be considered investment advice, a personal recommendation, or an offer to buy or sell any financial instruments.

This material has been prepared without considering any individual investment objectives, financial situations. Any references to past performance of a financial instrument, index, or investment product are not indicative of future results.

PU Prime makes no representation as to the accuracy or completeness of this content and accepts no liability for any loss or damage arising from reliance on the information provided. Trading involves risk, and you should carefully consider your investment objectives and risk tolerance before making any trading decisions. Never invest more than you can afford to lose.

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