DBG Markets: Market Report for May 29, 2026

Dollar Reverses on Hot PCE Priced In & Middle East Truce

US Dollar, Precious Metals & Crude Oil OutlookPCE Inflation Runs Hot, No Cut Remains

The highly anticipated US Personal Consumption Expenditures (PCE) Price Index data has been released, confirming that inflation remains uncomfortably elevated. This keeps the “higher for longer” narrative firmly in place for the Fed in 2026.

· The headline PCE Price Index for April came in hotter than expected, accelerating to 3.8% YoY and 0.4% MoM.

· Simultaneously, Core PCE stood firm at 3.3% YoY vs. the prior 3.2%.

Middle East Truce Pushed Back Energy Inflation Fears

Added to that, the US and Iran have reportedly reached a 60-day Memorandum of Understanding (MOU) on a truce. This pause will allow for further negotiations on nuclear terms and other regional issues.

US Dollar Outlook: Retest the 99.00 Again

Despite this hawkish fundamental data, the US Dollar experienced a sharp, counter-intuitive downward reversal, largely due to the market completely pricing in the hot PCE inflation earlier, alongside the easing of energy inflation fears.

USD Index, H4 Chart

After a strong boost in the Dollar pre-PCE, the Dollar Index eventually found heavy resistance at the 99.35 ceiling, breaking sharply back below the 99.00 mark.

Precious Metals Outlook: Reclaiming Critical Floors

Gold (XAUUSD): Regaining the $4,500 Handle

Gold experienced a volatile session. Initially pressured by the prospect of high yields, the precious metal violently reversed to the upside as the Dollar sold off on the truce news.

XAUUSD, H2 Chart

Gold initially dropped to the $4,400 mark yesterday, but as mentioned earlier, this remains a crucial support. The sudden Dollar weakness allowed bulls to surge, forming a V-shape recovery pattern and regaining ground near the critical $4,500 psychological level.

Silver (XAGUSD): Back Above $75.00

Silver mirrored Gold's sharp reversal. After suffering a breakdown earlier, Silver has managed to claw its way back above the critical $75.00 support level. Bulls must now fiercely defend this zone to prevent another catastrophic slide.

XAGUSD, H2 Chart

Technically, watch for the $75.00 support now. If this level holds, it could potentially stage the ground for another leg up.

Forex Outlook: EURUSD Eyes Reversal

With the US Dollar taking a sudden hit, major currency pairs are attempting to reverse their recent downtrends. Particularly the EURUSD, which we previously covered in our analysis regarding a potential bottom.

EURUSD, H4 Chart

The EURUSD is showing signs of a potential bullish reversal. However, traders must remain cautious and verify if this range-bound recovery can be sustained.

Energy Outlook: Oil Risk Premium Deflates

The oil market is taking the heaviest fundamental hit from the geopolitical developments.

With Middle East tensions actively easing due to the US-Iran 60-day truce, the massive geopolitical risk premium in crude prices has been rapidly reduced. Oil is now at severe risk of breaking its key support levels, setting the asset up to post a negative month.

UKOIL, H4 Chart

UKOIL currently trades near its 2-month low and the lower boundary of its major range since the US-Iran war breakout. This suggests continued pressure on oil prices as the geopolitical premium uncoils.

However, traders need to see a clear, decisive break of support to confirm a deeper collapse. For the near-term, any technical rebounds are highly unlikely to sustain momentum. The dominant strategy is to “sell the rally” unless we see a sudden, sharp escalation in Middle East hostilities.

Bottom Line & Asset Summary

Today's market delivered a classic “sell the fact” reaction. Hotter-than-expected US PCE data solidified the Fed's higher-for-longer narrative, but the Dollar still sharply reversed downwards. This was driven by a major geopolitical breakthrough as the US and Iran agreed to a 60-day truce MOU, completely deflating safe-haven demand and energy inflation fears. Consequently, Gold and Silver staged aggressive recoveries to reclaim critical structural floors, while crude oil remains pinned under intense pressure at 2-month lows.

Asset Outlook Summary:

· US Dollar (DXY): Failed at the 99.35 resistance and broke below 99.00. Reclaiming or staying below 99.00 determines the next directional move.

· Gold (XAUUSD): Formed a V-shape recovery back to $4,500. The $4,460 – $4,500 zone is now key support to maintain momentum.

· Silver (XAGUSD): Clawed back above $75.00, which now serves as the vital floor for potential further upside.

· EURUSD: Eyeing a reversal within a near-term 1.1600 – 1.1670 range, with a possible retest of 1.1620 expected first.

· Brent Crude (UKOIL): Hovering at the bottom of its 2-month range. The bias remains to sell the rally as risk premiums evaporate.