While gold's spectacular bull run is indeed dazzling, crude oil's emerging bull market holds even greater potential. On January 8th, U.S. crude oil WTI surged with a long bullish candlestick, closing over $2 higher than its opening price, signaling the start of a new upward trend. Beginning this Tuesday, WTI has consecutively formed long bullish K-lines, with its price today reaching a high of $64.26 (as of the European session), hitting a near four-month peak. Why is gold soaring? The reasons are the U.S. dollar index's sharp decline and rising risk aversion. Why is WTI rising? For precisely the same reasons: the dollar's plunge and heightened risk aversion. In just two weeks, the U.S. dollar index has unexpectedly tumbled from nearing the key 100 level to around 95. Since both gold and crude oil are priced in U.S. dollars, the greenback's weakness naturally provides them with inverse appreciation momentum. Regarding risk aversion, the current market focus is on the escalating tensions between Iran and the U.S.-Israel alliance. The U.S. aircraft carrier USS Abraham Lincoln has officially entered the Persian Gulf, Iran claims to be "200% prepared," and former President Trump has reportedly issued an ultimatum. Should conflict erupt in the Middle East, gold would surge again due to safe-haven demand, while crude oil would rise on fears of a potential blockade of the Strait of Hormuz. The Strait of Hormuz is a critical chokepoint for the flow of Middle Eastern oil to Asia and is controlled by Iran. If Iran finds itself at a disadvantage in its confrontation with the U.S., it might very well choose to blockade the strait to gain a strategic advantage. Such a blockade would impact the transportation of approximately 20 million barrels of oil per day, shattering the fragile balance of global crude oil supply and demand and unleashing upside potential for oil prices beyond current imagination. Although gold and crude oil have different intrinsic attributes, their current rally drivers are largely identical. The key difference may lie in their cycle stages: gold could be in the late phase of its overall uptrend, whereas crude oil might just be at the beginning. From a medium to long-term perspective, crude oil could emerge as the most promising dark horse asset of 2026. On the technical front, U.S. crude oil has formed a double-bottom pattern around the $55.9 and $54.86 levels, with the subsequent rally from $54.86 confirming the validity of this support structure. The upward momentum accelerated starting January 8th, and the price has now reached a new near four-month high. The previous intermediate high of $62.36 has been breached, and the market is now searching for a new intermediate peak. The current intermediate low of $54.86 serves as the most reliable medium-term support level. Close attention should be paid to the formation of any bearish reversal patterns on the daily chart, as their emergence could signal that the rally is approaching a significant medium-term resistance area.
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