Gold’s selloff is accelerating as a powerful macro combination weighs on the metal. Instead of acting as a safe haven, gold is being squeezed by rising oil prices and higher bond yields. A retest of the March low is now in sight, with 4,000 emerging as the next key level. How quickly it gets there will depend on the path of oil and yields.
Oil has taken the lead. Brent is now pressing the key $120 psychological level after reports that US President Donald Trump has instructed aides to prepare for an extended blockade of Iran. At the same time, the Strait of Hormuz effectively closed to most tankers. Markets are pricing a sustained supply shock, which reinforces inflation risks globally.
The transmission into financial markets has been swift. Rising oil prices are feeding into higher inflation expectations, lifting US 10-year yields above the 4.4% level.
At the same time, the Federal Reserve’s latest decision overnight has reinforced a hawkish tilt. The Fed may have held rates, but the details mattered. The three hawkish dissenters (Hammack, Kashkari, and Logan) didn’t just want to hold rates; they specifically voted against the “easing bias. For markets, the takeaway is clear: a dovish pivot is not imminent.
This creates a clear “double whammy” for Gold.
Technically, Gold’s extend decline suggests that rebound from 4,098.45 low has already completed at 4,889.24. Further fall is expected as long as 55 4H EMA (now at 4,681.60) holds, back towards 4,098.45 low, and possibly further to 4,000 psychological level.
The speed and depth of the decline will depend on developments in related markets. Brent’s behavior around the $120 level is critical. A clean break higher would likely reinforce inflation fears and push yields further up through 4.5%, accelerating Gold’s decline.
