Published: 6 January 2026,06:28
Daily Market Analysis New
*Dollar weakens after ISM data signals prolonged contraction in U.S. manufacturing
*Risk sentiment deteriorates amid rising geopolitical tensions involving Latin America
*Gold remains underpinned by safe-haven demand, central bank buying, and Fed rate-cut expectations
Market Summary:
The dollar index, which tracks the greenback against a basket of six major currencies, extended its losses after a fresh batch of weaker-than-expected U.S. economic data reinforced concerns about slowing growth momentum. The ISM Manufacturing PMI slipped to 47.9 in December from 48.2 previously, undershooting market expectations of 48.3 and marking the sector’s tenth consecutive month of contraction.
Further pressuring sentiment, ISM Manufacturing Prices Paid eased to 58.5 from the prior reading, missing expectations of 59.0 and signaling moderating cost pressures. Together, the data painted a picture of subdued industrial activity and softening inflation dynamics—conditions that strengthen expectations for further Federal Reserve rate cuts and weigh on the dollar’s yield advantage.
However, downside pressure on the greenback has been partially cushioned by a deterioration in global risk appetite. Heightened geopolitical uncertainty prompted some investors to rotate back into traditional safe havens, including the U.S. dollar and gold, limiting the currency’s decline. Risk sentiment was further unsettled after U.S. President Donald Trump escalated rhetoric in Latin America, threatening military action against Colombia following Washington’s claim that Venezuela’s leader had been abducted.
Speaking aboard Air Force One, Trump described both Venezuela and Colombia as “very sick,” accusing Colombia’s leadership of fueling narcotics trade into the United States. The remarks followed earlier threats toward Venezuela, amplifying concerns about regional instability and adding another layer of uncertainty to an already fragile global backdrop.
Gold, meanwhile, remains firmly supported after delivering a standout performance in 2025.. The precious metal continues to benefit from persistent geopolitical tensions, aggressive central bank purchases, and widespread expectations that the Federal Reserve will pursue further monetary easing. Waning confidence in the U.S. dollar—driven in part by mounting concerns over fiscal deficits and long-term debt sustainability—has also reinforced bullion’s appeal as a store of value.
Looking ahead, markets will remain sensitive to incoming U.S. economic data, geopolitical developments, and evolving expectations around the Fed’s policy path, with both the dollar and gold likely to stay volatile amid a complex macro landscape.
Technical Analysis
DOLLAR_INDX, H4:
The Dollar Index is trading lower following a retracement from the key resistance at 98.70. Technical indicators suggest bearish momentum may continue, as the MACD shows strengthening downside pressure while the RSI has pulled back to 52 from overbought territory.
Both indicators are pointing toward a potential death-cross, signaling that the index could extend its losses and retest the immediate support at 98.10, with a deeper move toward 97.55 possible if selling pressure persists.
However, if bearish momentum fails to sustain, the index may rebound and attempt to retest resistance at 98.70, with the next upside target at 99.25.
Resistance level: 98.70, 99.25
Support level: 98.10, 97.55
GOLD, H4:
Gold is holding firm after breaking above its previous resistance zone, although price action has since entered a consolidation phase. Momentum indicators suggest caution, with the MACD showing early signs of bearish divergence and the RSI easing to 60 after retreating from overbought levels. This points to a potential technical pullback or sideways movement in the near term.
On the upside, a resurgence of bullish momentum could drive gold higher toward resistance at 4495.00, with a further extension to 4535.00 possible.
On the downside, a failure to sustain buying pressure may result in a retracement to support at 4420.00, with a deeper test of 4330.00 if selling intensifies.
Resistance Levels: 4495.00, 4535.00
Support Levels: 4420.00, 4330.00
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