@Mira White Peach
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Mira小白桃
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Crude Oil Rises—Why Is Gold Under Pressure Instead?
Recently, the market has been influenced at the same time by geopolitical risks, energy prices, and expectations for Federal Reserve policy.
At present, Brent crude is around $107, while WTI is around $105. Oil prices have remained at elevated levels. What the market is most worried about is not crude oil itself, but its impact on inflation expectations.
The logic is simple:
Oil prices rise → inflation pressure increases → the Fed’s room to cut rates is constrained → U.S. Treasury yields rise → gold comes under pressure.
So right now, gold is being pulled by two forces:
On one hand, safe-haven demand driven by geopolitical conditions supports gold;
On the other hand, higher oil prices boost inflation and rate-expectation pressures that suppress gold.
That’s also why you can’t simply understand it as:
“Geopolitical risk rises = gold must rise.”
In reality, gold’s short-term price action still depends on the U.S. dollar and U.S. Treasury yields.
Currently, the 10-year Treasury yield is already around 5%. If yields continue to move higher, gold’s short-term downside pressure could increase further.
Next, I will focus on three variables:
First, crude oil.
If oil prices keep rising quickly, inflation expectations may heat up further.
Second, Treasury yields.
If the 10-year yield keeps moving higher, gold may continue to be weighed down.
Third, the Federal Reserve.
Today’s FOMC rate decision is only the first step; more important is the policy guidance/signals after the meeting.
If the Fed releases more hawkish signals:
A stronger dollar and firmer yields → gold faces pressure.
If the policy statement is not as hawkish as the market expected:
Yields fall back → gold receives support.
So my view on gold now won’t be based solely on geopolitical news.
Crude oil determines inflation expectations, interest rates determine the cost of capital, and risk-off/safe-haven sentiment determines how much support is underneath gold.
Only when all three factors move at the same time is the key to understanding this round of the gold market.
$XAU
$CL
$BZ
Recently, the market has been influenced at the same time by geopolitical risks, energy prices, and expectations for Federal Reserve policy.
At present, Brent crude is around $107, while WTI is around $105. Oil prices have remained at elevated levels. What the market is most worried about is not crude oil itself, but its impact on inflation expectations.
The logic is simple:
Oil prices rise → inflation pressure increases → the Fed’s room to cut rates is constrained → U.S. Treasury yields rise → gold comes under pressure.
So right now, gold is being pulled by two forces:
On one hand, safe-haven demand driven by geopolitical conditions supports gold;
On the other hand, higher oil prices boost inflation and rate-expectation pressures that suppress gold.
That’s also why you can’t simply understand it as:
“Geopolitical risk rises = gold must rise.”
In reality, gold’s short-term price action still depends on the U.S. dollar and U.S. Treasury yields.
Currently, the 10-year Treasury yield is already around 5%. If yields continue to move higher, gold’s short-term downside pressure could increase further.
Next, I will focus on three variables:
First, crude oil.
If oil prices keep rising quickly, inflation expectations may heat up further.
Second, Treasury yields.
If the 10-year yield keeps moving higher, gold may continue to be weighed down.
Third, the Federal Reserve.
Today’s FOMC rate decision is only the first step; more important is the policy guidance/signals after the meeting.
If the Fed releases more hawkish signals:
A stronger dollar and firmer yields → gold faces pressure.
If the policy statement is not as hawkish as the market expected:
Yields fall back → gold receives support.
So my view on gold now won’t be based solely on geopolitical news.
Crude oil determines inflation expectations, interest rates determine the cost of capital, and risk-off/safe-haven sentiment determines how much support is underneath gold.
Only when all three factors move at the same time is the key to understanding this round of the gold market.
$XAU
$CL
$BZ
Disclaimer: Includes third-party opinions. No advice. Binance AI may be used without guarantee. See T&Cs.