Source | Jerry Chen Edited by Eddie Wu
Editor's Note
Recently, the market is shrouded in uncertainty. Influenced by multiple factors including geopolitical issues, central bank policies, and tariff concerns, funds are being pulled in various asset classes.
Some institutions have even begun to study historical data, concluding that the stock market often achieves positive returns in the year following a major conflict. This is because geopolitical conflicts typically do not lead to the end of economic cycles; rather, policy tightening is often the cause of economic cycle endings. Currently, the market has not shown typical signs indicating the end of an economic cycle.
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Some institutions have also indicated that although the near-term delivery price of Brent crude oil briefly surpassed $90 per barrel, the long-term contracts have seen relatively small increases, suggesting that the market expects supply disruptions to be temporary.
However, the U.S. has recently proposed a new tariff plan, adding another layer of uncertainty to an already confused market.
The geopolitical situation in the Middle East continues to evolve, and misfortunes do not come alone. According to U.S. media reports, the Trump administration has once again initiated trade investigations against 16 countries on March 11, based on Section 301 of the Trade Act of 1974.
What impact will tariffs have on the global economy and financial markets?
The current market logic is relatively clear: fluctuations in Middle Eastern geopolitics have led to safe-haven funds flowing into oil and the U.S. dollar, while global stock markets and non-U.S. currencies continue to face selling pressure. At the same time, the rising risk of inflation may force global central banks to shift to a rate hike path, which puts pressure on gold.
Oil prices still face upward pressure
During the Asian afternoon trading session on March 9, G7 finance ministers held an emergency meeting to discuss the possibility of a coordinated release of oil reserves, coordinated by the International Energy Agency (IEA). Oil prices began to retreat.
On Monday afternoon in Eastern Time, Trump hinted that the conflict with Iran was nearing its end, claiming that Washington was far ahead of the initially set four to five-week timeline. Although the Strait of Hormuz is effectively closed, investors are increasingly inclined to believe that the situation will ultimately ease.
After Trump's &#34;TACO&#34; (an acronym for Trump Always Chickens Out, literally translated as &#34;Trump always backs down,&#34; a term popular in Wall Street and U.S. public opinion circles since 2025, used to summarize his negotiation and policy style, and has given rise to an arbitrage trading strategy), international oil prices fluctuated nearly 30% in a single day, dropping from around $120 to around $80. At a press conference held around 5:30 PM Eastern Time on Monday, Trump again announced that he had &#34;won.&#34;
However, the good times did not last long, as bulls made a comeback. As of 1:00 PM Beijing time on March 12, Brent crude and WTI crude prices were reported at $98 and $92, respectively
The International Energy Agency (IEA) has recently decided to release 400 million barrels of oil reserves to cool down oil prices, with the United States expected to release 172 million barrels. However, this seems to be an opportunity for oil bulls to &#34;buy the fact.&#34;
Considering that the IEA has a total inventory of only 1.2 billion barrels, the operational time required for coordinated actions among 32 countries, and the daily production release limit, this clearly cannot address the daily shortfall of 20 million barrels in the Strait of Hormuz, thus the risk of oil supply may persist for a long time.
The more critical issue is that once infrastructure is destroyed, it takes much longer to restore capacity. Iran has even warned that oil prices could reach $200 per barrel. The only fundamental solution to high oil prices is the recovery of production capacity and exports.
Strong Dollar Back in Focus
In addition to the inflation/stagflation risks brought by oil prices, the resurgence of tariff disputes may continue to weigh on market sentiment.
According to U.S. media reports, the Trump administration launched trade investigations against 16 countries on Wednesday, based on Section 301 of the Trade Act of 1974 (which allows the U.S. government to impose tariffs on so-called &#34;unfair trade practices&#34;), aiming to reapply tariff pressure to recover losses and face from last month's core tariff plan being overturned by the Supreme Court. This move led to pressure on the Asia-Pacific stock markets at the opening on March 12, while U.S. stocks continued to decline after hours.
The weak dollar has been the theme for the entire past year, but when risk events arise, the dollar's safe-haven role is once again evident. Especially since the U.S. is an energy producer, the impact of oil prices is clearly much less than that on most Asian countries, which are oil importers.
The dollar index broke through the 99 mark on March 11 and gapped up on March 12, showing strong upward momentum. The heightened inflation risk suggests that the Federal Reserve may only cut rates by 25 basis points this year, with the timing possibly pushed back to the fourth quarter, which continues to provide support for the dollar. The strong dollar caused gold to continue its volatile trend below $5,200 on March 11, and the USD/JPY rose to around 159.
Similarly, under the influence of a strong dollar, European and American stock markets generally fell overnight, but the Nasdaq closed slightly higher, indicating that tech stocks (especially oversold large tech stocks) may become a third type of safe-haven choice. Oracle jumped 9% after its earnings report, somewhat easing AI-related anxieties.
Gold Temporarily Under Pressure
The current geopolitical situation does not seem to favor gold. Gold briefly broke through $5,200 on March 11, but the strong dollar and oil have left bulls lacking the momentum to push higher.
The three-day sell-off from late January to early February is still dominating gold's price movements, with that significant retreat causing prices to drop over $1,000 in a short time, and the current highs and lows have yet to break.
However, what may boost the morale of bulls is the increasingly stable $5,000 level, which initially served as resistance after the retreat but has acted as a support level for the past two weeks. This provides ongoing support for bulls to continue rising, but they must first deal with several short-term levels.
As shown in the chart below, after gold returned below $5,200, the trend line in the chart may continue to limit the upward space for gold prices. If it can effectively break through $5,175, it will challenge the $5,200 area again, but the risk of a rebound and fall still needs to be noted.
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In the downward direction, $5,130 is worth paying attention to, followed by $5,060. Considering that the long-term upward trend of gold prices remains intact, if gold prices approach the lower edge of the fluctuation area around $5,040, it is worth considering whether to start going long on the pullback.
S&amp;P 500 Struggles at 6,700 Points
Although we witnessed a late rebound in the U.S. stock market on March 11, the deteriorating macro environment and geopolitical backdrop suggest that this rebound may be difficult to sustain.
In both a literal and metaphorical sense, the Strait of Hormuz increasingly resembles a minefield. With rising energy supply risks, Brent crude oil briefly broke above $100 per barrel, and in just over a week, market expectations for a Federal Reserve rate cut have halved, with the anticipated cut now reduced to about 25 basis points. This is clearly not an environment that typically provides strong support for the stock market.
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The S&amp;P 500 index futures appear heavy, approaching 6,700 points, a level that has been tested repeatedly before. This is a chaotic area that cannot be fully trusted nor ignored. Prices often break through here directly, as if it does not exist, but many times they cannot sustain, leading to sharp reversals.
If it falls below 6,700 points, it may be worth waiting for a retest and rebound to confirm whether the bears are preparing to break through. If necessary, a shorter time frame can be used to track price dynamics more closely.
If the price cannot reclaim this level, consider establishing a short position, with a stop-loss placed just above to provide protection, targeting the 200-day moving average, where a significant bullish reversal occurred earlier this week. Other potential lower targets include Monday's low and 6,508 points, which have served as both support and resistance at various times last year.
If 6,700 points are held, a less likely strategy is to consider establishing a long position, with a stop-loss placed just below to provide protection, targeting the downward trend line from late February, and if that trend line is consistently broken, then focus on the 50-day moving average.
(This article was published in the March 14 issue of Securities Market Weekly. The author is a senior analyst at GAIN Capital. The views expressed in this article are solely those of the author and do not represent the position of this publication.)

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Geopolitical factors drive the dollar up, but U.S. stocks and gold face challenges. The market is influenced by geopolitical issues, central bank policies, and tariff problems, with funds fluctuating across various assets. Although oil prices briefly surpassed $90, the market expects supply disruptions to be temporary. The new tariff proposal in the U.S. increases market uncertainty, leading to a flow of safe-haven funds into the dollar and crude oil, while global stock markets and non-U.S. currencies are sold off. Inflation risks may force central banks to raise interest rates, putting pressure on gold

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Geopolitical factors drive the rise of the US dollar, but gold in the US stock market struggles to break through