Gold is under pressure as oil rises above $100 and expectations for interest rate cuts decline
📉 Gold is experiencing weakness in momentum despite ongoing tensions between the United States, Israel, and Iran, indicating that the demand for safe havens is no longer the only factor driving price movements. After a strong rise due to geopolitical tensions, gold is currently facing profit-taking and a decline in bullish momentum.
🛢️ Market focus has shifted to crude oil prices, which have risen above $100 per barrel. This rise brings inflation fears back to the forefront, reducing expectations that the Federal Reserve will cut interest rates soon.
💵 Meanwhile, the strength of the US dollar and rising Treasury yields are putting pressure on gold. Since gold does not yield returns, it becomes less attractive when investors can achieve higher returns from cash or bonds.
🔎 Short-term outlook:
If oil prices remain high and the Federal Reserve continues its cautious stance on interest rate cuts, gold may continue to trade with a weak tone in the near term.
However, if geopolitical tensions escalate further or global economic growth starts to slow noticeably, demand for gold as a safe haven may return quickly.
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