Precious Metals Market Stalls as US Dollar and Crude Oil Prices Rise

The precious metals market has stalled in its recovery after a strong start to the week. The surge in Middle East tensions and the subsequent rise in crude oil prices have added upward pressure to both the US dollar and the 10-year Treasury yield.

According to AG Thorson, a registered CMT and expert in technical analysis, if geopolitical tensions continue to escalate and Treasury yields keep rising, the risk of additional downside in precious metals will increase. The Gold Cycle Indicator finished at 32, indicating that prices remain deeply oversold.

The rally in crude oil prices is testing the downtrend line near $92.00, and a continued surge above $100 per barrel is possible if the Houthis shut down the Red Sea. This would disrupt the flow of roughly 4 million barrels of oil per day and fuel inflation concerns, pushing Treasury yields even higher.

The US dollar has closed above its short-term trendline, signaling the potential for a move to fresh highs as Treasury yields continue to rise. A rally toward the 103-104 area remains a realistic possibility, but AG Thorson still expects the dollar to form a multi-year top within the next one to two months.