Published: 3 March 2026,07:58
Daily Market Analysis New
*Dollar and Gold decouple from historical inverse correlation, both rallying simultaneously as “Operation Epic Fury” enters a sustained phase.
*President Trump’s “5-week” timeline for military operations has shifted market expectations from a temporary spike to a long-term structural risk.
*U.S. Treasury sell-off intensifies as yields climb on “war-inflation” fears, with markets now pricing in a more hawkish Federal Reserve to counter rising energy costs.
*Safe-haven demand remains “sticky” as the U.S. urges immediate citizen evacuations from the Middle East following retaliatory strikes in Beirut and across the Gulf.
Market Summary:
The global “flight to quality” has intensified as investors digest the reality of a protracted conflict in the Middle East. While typically a stronger U.S. dollar acts as a headwind for bullion, both assets are currently surging in tandem—a rare market phenomenon that underscores the severity of the current geopolitical shock. President Trump’s recent confirmation that strikes could continue for four to five weeks has effectively removed the “quick resolution” premium from the market, forcing a wholesale repricing of risk.
The U.S. Dollar Index (DXY) continues to extend its gains, supported by its status as the world’s ultimate liquidity haven. However, the move is being bolstered by more than just fear; an aggressive sell-off in U.S. Treasury bonds has sent yields higher. Investors are increasingly concerned that a month-long war will lead to sustained energy-driven inflation, potentially forcing the Federal Reserve to pivot toward a more tightening monetary policy despite the global uncertainty. The CME FedWatch Tool now reflects a sharp drop in expectations for rate cuts in March or April.
Gold prices have mirrored the dollar’s strength, rallying nearly 25% year-to-date as the conflict expands. Fresh explosions in Tehran and Beirut, coupled with Iran’s vow to “fight back” against U.S. and Israeli forces, have driven institutional investors into hard assets. Beyond the immediate military threat, gold is finding support from growing concerns regarding Federal Reserve independence and the long-term fiscal impact of a sustained military campaign.
On the economic data front, traders will now look to this week’s ADP Employment and Non-Farm Payrolls data to see if the U.S. economy remains resilient enough to handle a “higher-for-longer” interest rate environment in the face of war.
Technical Analysis
On the H4 timeframe, gold is currently testing the major resistance level of 5360.00 after a dramatic weekend gap-up; a clean breakout and 4-hour candle close above this ceiling would confirm a Fibonacci extension toward 5595.00, but momentum is flashing a yellow light.
The RSI is currently pegged at 74, deep in overbought territory, while the MACD is showing early signs of bearish divergence, suggesting that the initial “panic buy” may be losing steam.
Traders should be cautious of a potential technical correction or “bull trap” that could see prices retreat to retest the 5175.00 support zone if the 5360.00 level isn’t decisively cleared on high volume.
Resistance Levels: 5360.00, 5595.00
Support Levels: 5175.00, 5045.00
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