Harmovest Capital | Key Insights: Has the Safe-Haven Rally Run Its Course?

19/05/2026 | Market Highlights

Key Takeaways

• Planned U.S. military action against Iran has been postponed.

• Easing geopolitical tensions have significantly reduced safe-haven demand.

• The U.S. dollar is facing short-term pressure and entering a corrective phase.

Market Recap

According to reports, President Donald Trump stated that the planned U.S. military strike on Iran was delayed at the request of Gulf leaders, creating room for potential diplomatic negotiations.

Trump also emphasized that military action could resume quickly if negotiations fail. This dual-track approach of diplomacy and military pressure continues to keep markets cautious.

Gulf countries, including Qatar, Saudi Arabia, and the UAE, are believed to have encouraged restraint in an effort to prevent further escalation in the region.

Meanwhile, Iran has maintained its position, with significant disagreements remaining over nuclear issues and strategic shipping routes, leaving the outlook for negotiations uncertain.

Although geopolitical tensions had previously supported oil prices and safe-haven assets, the postponement of military action has led to a rapid decline in the markets geopolitical risk premium.

Market ImpactMacro Implications

• Lower safe-haven demand

• Improved sentiment toward risk assets

• Short-term weakness in the U.S. dollar

Impact on Major Assets

• U.S. Dollar Index (DXY): Under pressure and pulling back

• Precious Metals (Gold/Silver): Increased volatility as safe-haven support fades but remains partially intact

• U.S. Equities: Risk appetite improves, supporting broader market sentiment

Economic Data to Watch Today

• UK Unemployment Rate

• Canada CPI Inflation Data

• U.S. Housing Sales Data

Focus:

If U.S. housing data continues to weaken, it may reinforce expectations of a broader economic slowdown.

Market Sentiment

• Fear & Greed Index: 63 (Greed)

• Significant improvement from the previous reading of 36, indicating a strong rebound in market risk appetite.

Markets are gradually absorbing geopolitical developments, with capital rotating back into equities and selected commodity markets.

Technical Analysis | XAUUSD (Gold)

Gold is experiencing short-term downside pressure as safe-haven demand moderates.

• Price has broken below the EMA89 and EMA144 support zones.

• A bearish “N-shaped” pattern has formed.

• Price is consolidating around the 4,550 area.

• Momentum remains weak, suggesting the correction may continue.

Overall, gold remains vulnerable to further downside in the near term, though renewed geopolitical tensions could quickly revive buying interest.

Market Outlook

The market narrative is shifting from geopolitical risk to macroeconomic data.

With safe-haven demand fading, both the U.S. dollar and gold are losing part of their defensive appeal. Going forward, market direction is likely to be increasingly driven by economic data and growth expectations.