Gold holds $4,000: oil shock and hawkish Fed rhetoric create market tension
On Monday, the precious metal managed to return above the psychologically significant level of $4,000 per ounce, although quotes were hovering around this mark over the weekend. The market again came under pressure from two powerful but opposing factors: a sharp jump in oil prices and growing voices in favor of raising the key interest rate by the US Federal Reserve (Fed).
Brent crude oil confidently broke through the $90 per barrel mark. The reason was an escalation of geopolitical tensions — another, already the ninth in recent days, US strikes on Iran. There are reports of American military deaths in Jordan, as well as new attacks by Iran on Sunday. This oil shock is once again fueling inflation expectations, although June data indicated some easing of price pressure.
At the same time, the number of Fed officials open to the possibility of another rate hike in July is growing. The "hawkish" voices have been joined by Cleveland Federal Reserve Bank President Beth Hammack. Fed Chairman Jerome Powell made it clear that the regulator does not intend to tolerate prolonged high inflation, promising heated debates at the upcoming meeting. This puts direct pressure on gold, which, yielding no income, becomes less attractive in a rising borrowing cost environment.
Metals market under crossfire
Despite a 2.5% correction last week and a short-term drop below $4,000 (the first since November 2025), data from the Commodity Futures Trading Commission (CFTC) shows that speculators on COMEX increased their net long positions in gold to 119,147 contracts. This indicates a continuing belief in the upward trend.
However, the overall picture in the precious metals market is mixed. Silver is also showing a sharp decline. Gold's safe-haven function amid the military conflict in the Persian Gulf is not fully effective: rising oil prices, pushing the Fed towards policy tightening, partially offset demand for safe assets.
Expert commentary: The current situation is a classic example of a conflict between fundamental factors. The geopolitical premium in gold is battling monetary pressure. Holding the $4,000 level will depend on which narrative prevails in the market: the escalation in the Middle East or the Fed's hawkish stance. For now, the scales are tipping, and every new macroeconomic report or headline from the conflict zone could become a decisive trigger.