Quad Witching Day Meets Iranian Gunfire, Market Enters "Hell Mode"! Which Will Break Out First—Crude Oil, Gold, US Treasuries, or the US Dollar?

Caixin Finance APP News — On Friday (March 20), the global financial markets are caught in a double squeeze of extreme geopolitical uncertainty and expectations of major central banks shifting their monetary policies. As the situation in the Middle East suddenly escalates—particularly Iran’s attack on a Kuwaiti refinery and Israel’s military operations targeting Tehran—fears of energy supply disruptions have turned into actual panic. Meanwhile, collective surges in bond yields in major economies reflect a sharp re-pricing of the environment of “long-term high interest rates.” Amid liquidity disruptions from “Quadruple Witching” derivatives expirations, risk aversion and tightening expectations intertwine, driving crude oil, gold, and forex markets into a highly volatile turning point.

Crude Oil: Volatility at High Levels and Double Top Pressure Amid Supply Disruptions

Driven directly by geopolitical tensions, Brent crude oil has experienced a prior rally and is now hovering around 107.76 USD. Fundamentally, the Strait of Hormuz, which handles about 20% of global oil and LNG shipments, faces heightened risks due to escalating conflicts between Iran and Israel. The attack on a Kuwaiti refinery has created a demand gap of about 12% that cannot be quickly filled, with some institutions warning that if hostilities continue, oil prices could break through 180 USD in late April.

Technically, Brent is in a short-term correction within a larger bullish trend. The 4-hour chart shows the price near the middle Bollinger Band at 107.05, providing strong support. However, the MACD indicator shows DIFF crossing below DEA and green bars continuing, indicating a short-term correction may be needed. The candlestick pattern from early March’s 119.45 and recent highs 119.11 suggests a “double top” formation, creating heavy resistance overhead.

In the next 2-3 trading days, focus should be on whether the price can hold above the middle band at 107.05. If stabilized, it may attempt to retest the upper band at 114.95; if it breaks below, support could shift down to the lower Bollinger Band at 99.16. Under the combined influence of extreme supply disruption expectations and technical correction pressures, crude oil will likely remain in a high-volatility phase.

Spot Gold: Oversold Rebound Logic Under Bearish Dominance

Unlike oil, which is supported by supply concerns, spot gold has recently been very weak, currently quoted at 4776.32 USD. Although geopolitical tensions usually favor safe-haven assets, the collective surge in global bond yields has dealt a fatal blow to zero-yield gold. The US 10-year Treasury yield has risen above 4.3%, with UK and German bond yields also reaching multi-year highs, greatly increasing the opportunity cost of holding gold.

From a technical perspective, gold is in a clear bearish channel. The 4-hour chart shows that after breaking below the lower Bollinger Band, the price rebounded slightly but remains under resistance at the middle band 4828.82. The MACD shows the two lines approaching zero with a potential flattening, indicating diminishing bearish momentum and a possible oversold rebound. However, the overall weak trend remains.

In the short term, gold’s recovery depends on breaking through the 4828 resistance. Failing to do so, the price is likely to test recent lows at 4503 and the lower Bollinger Band at 4520. With global interest rate expectations resetting, gold’s “safe-haven” attribute is temporarily overshadowed by “interest rate sensitivity.”

US Dollar and US Treasuries: Reignited Tightening Expectations and High-Range Battles

The US dollar index is currently around 99.3250. Recently, the dollar’s movement has been supported by rising US bond yields and waning global risk appetite, but internal divergence is evident. Due to hawkish signals from European and UK central banks amid inflation pressures, the pound and euro have faced some pressure against the dollar, leading to a sideways adjustment in the dollar index.

The 4-hour chart shows the dollar index breaking below the middle Bollinger Band but finding support near 99.05. The MACD’s death cross and the green momentum bars suggest a short-term adjustment phase, with the two lines approaching zero, indicating a trend shift. Resistance is at the middle band 99.70, with key support between 98.50 and 99.05.

Regarding US Treasuries, influenced by tariff rhetoric and rising energy costs fueling inflation expectations, the 2-year yield has risen to 3.875%. Over the next 2-3 days, if the dollar index can hold above 99, its safe-haven status combined with bond effects may keep it strong; if it falls below support, a sharp correction toward 98.5 could occur.

Future Outlook

In the next 2-3 trading days, markets are expected to enter a highly dynamic and volatile phase. Oil remains supported by real supply disruptions; despite technical corrections, the bullish logic remains intact, with broad oscillations in the 107-115 USD range. Gold faces risks of a “second dip” after oversold rebounds, with limited upside until interest rate peak expectations stabilize. The dollar index and US bond yields will be key indicators; if the dollar stabilizes above 99, commodity rebounds may be suppressed. Given the “Quadruple Witching” effects, investors should remain alert to liquidity risks and sudden gaps caused by geopolitical news.

【FAQs】

1. Why does gold fall sharply when geopolitical tensions worsen?

This mainly stems from rising holding costs. Although geopolitical risks boost safe-haven demand, the dominant market logic now is rising inflation expectations leading to global rate hikes. US, UK, and German bond yields surge collectively, significantly reducing gold’s appeal as a zero-yield asset. When “interest rate pressure” outweighs “safe-haven demand,” gold prices tend to diverge downward.

2. Does the “double top” pattern in Brent crude mean the end of the upward trend?

Currently, it’s only a “short-term correction signal.” While the double top near 119 USD limits upside, the fundamental support from physical supply disruptions remains. As long as the Strait of Hormuz blockade risk persists, even a technical pullback to the lower band does not fundamentally weaken the large-scale bullish logic.

3. Why does the recent dollar index movement seem more conflicted than US bond yields?

Because currency pairs reflect relative value. Although rising US yields support the dollar, hawkish statements from German and European officials have boosted euro and pound rate expectations, partially offsetting dollar strength. This “global tightening race” causes the dollar to fluctuate sideways rather than trend unilaterally higher.

4. What is “Quadruple Witching,” and how does it affect the next two trading days?

“Quadruple Witching” refers to the simultaneous expiration of stock options, index options, stock futures, and index futures. It often leads to increased volume and unpredictable market swings. In the current high geopolitical risk environment, derivative unwinding and hedging may amplify volatility in oil and gold, causing sudden spikes or drops.

5. If the dollar falls below 99, what chain reaction might occur in commodities?

Since commodities are dollar-denominated, a weakening dollar generally supports oil and gold from a currency translation perspective. Breaking below key support could ease the current pressure from high US bond yields on gold, potentially shifting gold from “oversold correction” to a strong rebound, and pushing oil out of its correction zone.