Gold has settled above $4,000 amid the oil shock and hawkish rhetoric from the Fed.
On Monday, the precious metals market showed a confident recovery, with gold breaking through the psychologically important barrier of $4,000 per ounce. Over the weekend, quotes were slightly below this mark, but a new round of geopolitical tensions and a sharp jump in Brent crude oil prices above $90 per barrel restored the "bullish" sentiment. However, over the past week, the precious metal lost 2.5%, and at one point the price even fell below $4,000 — for the first time since November 2025, when this level was reached at the end of June.
Oil Factor and Inflation Risks
The escalation of the conflict in the Middle East has once again fueled inflation expectations. The ninth U.S. strike on Iran in recent days, the deaths of American military personnel in Jordan, and new attacks from Tehran — all of this is pushing oil quotes higher. Rising commodity prices traditionally heighten concerns about inflation persistence, despite June data that indicated some easing of price pressure.
Against this backdrop, representatives of the U.S. Federal Reserve are increasingly speaking out in favor of a possible key rate hike as early as July. Cleveland Fed President Beth Hammack has joined the growing number of "hawks," stating that the regulator does not intend to tolerate prolonged high inflation. Fed Chairman Jerome Powell made it clear in Congress that deviating from the course of fighting inflation is unacceptable. This creates a strong headwind for gold, which does not generate yield.
Metals Under Pressure: Bearish Signals
The correction in the precious metals market is gaining momentum. The price of silver has also dropped sharply, and gold's safe-haven function during military conflicts does not always work. CFTC data shows that speculators on COMEX increased their net long positions in gold to 119,147 contracts in the week ending July 14. This indicates that the market is still pricing in an upward move, but the realization of this scenario is in question.
The rise in oil prices, triggered by military actions, paradoxically hits gold: it pushes the Fed toward tightening policy. The combination of high rates and a geopolitical premium could partially offset demand for the precious metal as a safe-haven asset. The chances of holding the $4,000 mark now directly depend on the regulator's rhetoric and the dynamics of oil quotes. The market is frozen, awaiting fresh signals.
Analytical Commentary from Cryptalist: The current situation resembles a "bull trap." On one hand, geopolitics is pushing gold higher; on the other, the oil shock is forcing the Fed to act more aggressively. As long as Brent stays above $90, pressure on the precious metal from monetary policy will only intensify. A break below $4,000 could open the door to testing the $3,850–3,900 zone.