The atmosphere at the Republican midterm convention in Dallas has once again made the Iranian situation an unavoidable topic. In ordinary times, this might just be verbal sparring, but with oil prices and safe-haven assets in the picture right now, it becomes somewhat subtle.
$XAU has been hovering around 4395, and $CL has also touched 95.5. If the conflict stays at the threat level only, gold prices may not be able to rise much, because there are too many profit-taking positions at this level. But what’s really worth paying attention to is crude oil’s reaction—if the $95 level is broken upward with volume, the logic changes: the market would start pricing the risk premium for the Strait of Hormuz.
Rather than chasing higher gold, I’d prefer to watch for a breakout in $CL . If it pulls back to 93.5 and holds without breaking, that’s the chance to participate. Chasing it directly is not as comfortable. What military action fears most is the moment when “expectations are priced in”—that’s actually the window for a contrarian trade.
#Gold
$XAU has been hovering around 4395, and $CL has also touched 95.5. If the conflict stays at the threat level only, gold prices may not be able to rise much, because there are too many profit-taking positions at this level. But what’s really worth paying attention to is crude oil’s reaction—if the $95 level is broken upward with volume, the logic changes: the market would start pricing the risk premium for the Strait of Hormuz.
Rather than chasing higher gold, I’d prefer to watch for a breakout in $CL . If it pulls back to 93.5 and holds without breaking, that’s the chance to participate. Chasing it directly is not as comfortable. What military action fears most is the moment when “expectations are priced in”—that’s actually the window for a contrarian trade.
#Gold
