Solid Goold Trading

Monday’s Edition

With Nick Goold

Tensions in the Middle East dominated markets last week. After Israel attacked Iran, the U.S. joined in with airstrikes on three major Iranian nuclear sites. This caused oil prices to jump early in the week and stay strong, as traders worried about supply problems. Stock markets in the U.S. and Japan fell slightly, with rising conflict making investors more cautious.

Economic news was also weak. U.S. retail sales were lower than expected, showing that higher tariffs may be hurting consumer spending. The Federal Reserve kept interest rates unchanged at 4.25%–4.5%, but signaled it may cut rates twice later in 2025. At the same time, inflation and unemployment forecasts were raised. The U.S. dollar gained strength, especially against the yen, as the Bank of Japan also left its policy unchanged.

Gold went up early in the week as investors looked for safety during the Middle East conflict. But as the U.S. dollar got stronger, some sold gold and prices stopped rising. Bitcoin dropped toward $100,000 as traders sold risky assets due to growing fear and uncertainty.

Markets This Week

U.S. Stocks

The Dow moved slightly lower last week as concerns over the Middle East conflict and repeated failure to break above 43,000 triggered some selling. Recent U.S. economic data has been weaker than expected, and with the Federal Reserve not in a rush to cut interest rates, further downside pressure could emerge. A break below the 42,000 support level is possible if sentiment weakens further. Resistance remains at 43,000 and 44,000, with support at 42,000, 41,500, and 41,000.

Japanese Stocks

The Nikkei 225 attempted to push higher last week as the yen weakened, supported by the Bank of Japan’s signal to keep long-term rates low. However, the ongoing delay in U.S.–Japan trade talks is hurting sentiment. While yen weakness may support the index, uncertainty from the Middle East may limit gains. Range trading remains the best approach this week. Key support levels are at 37,500円, 36,500円, and 36,000円, with resistance at 38,800円, 39,000円, and 40,000円.

USD/JPY

USD/JPY broke above the 146 resistance level last week as the U.S. dollar rebounded following the Federal Reserve’s latest meeting, where Chair Powell projected two rate cuts later this year. Meanwhile, the Bank of Japan expressed continued concern over the domestic economy and signaled no rush to raise rates. With both monetary policy and technical momentum on its side, the uptrend looks strong—buying on dips remains the preferred strategy. Resistance is seen at 148.00 and 150.00, with support at 146.0, 145.00 and 142.00.

Gold

Gold started the week strongly as the conflict between Israel and Iran intensified. However, the market failed to hold above the May highs, leading to profit-taking as high volatility continued. Despite the pullback, buying on weakness remains the preferred strategy, with ongoing geopolitical uncertainty likely to support safe-haven demand. Support is at $3,400, $3,300, and $3,250, while resistance is at $3,450 and $3,500.

Crude Oil

Crude oil opened the week with a sharp move higher after heavy fighting broke out between Israel and Iran over the weekend. While some short-term profit-taking emerged due to overbought conditions, renewed U.S. involvement in the conflict sparked further buying as the risk of supply disruptions grew. Volatility remains elevated, providing opportunities for both short- and long-term traders. Short-term momentum trading may be effective, while medium-term traders could wait for a pullback to buy—or consider selling at current highs while hoping for a de-escalation. Resistance is at $80, $85, and $88, with support at $65 and $60.

Bitcoin

Fighting in the Middle East weakened risk sentiment, putting pressure on Bitcoin. The price dipped to $100,000 over the weekend as news broke of U.S. airstrikes on Iran, triggering strong buying below that level. While short-term weakness may continue, this could offer profitable short-selling opportunities. Medium-term outlook remains positive as long as Bitcoin holds above $95,000. Key support is at $100,000 and $95,000, with resistance at $110,000, $112,500, and $115,000.

This Week’s Focus

Monday: E.U. PMI, U.K. PMI, U.S. PMI
Tuesday: U.K. Bank of England's Governor Bailey speech, U.S. Consumer Confidence, U.S. Federal Reserve Chair Powell testifies
Wednesday: U.S. New Home Sales
Thursday: U.S. Durable Goods, U.S. GDP, U.S. Pending Home Sales
Friday: Japan Tokyo CPI, U.K. GDP, U.S. Core PCE Price Index, U.S. Michigan Consumer Sentiment

Developments in the Middle East will be closely watched this week, as markets look for Iran’s response to the recent U.S. bombing of its nuclear sites. Any signs of escalation could lead to disruptions in oil supply, pushing crude prices higher. This would likely hurt overall risk sentiment, putting pressure on global stock markets while supporting safe-haven assets like gold.

In the U.S., Fed Chair Jerome Powell will testify before the House Financial Services Committee—a key event that could impact markets, especially as President Trump continues to call for interest rate cuts. Meanwhile, Japan is still hoping to secure a trade deal with the U.S., but talks have stalled as Trump remains focused on other international matters.