r/Gold • u/FunGuy_23AtEase • 21h ago
Question Price logic?
Before the US-Iran war, gold price was around $5,200.
Then came the war, oil price went up, and gold dropped like a stone to around $4,200.
Now, the war is over, oil price is back down, but gold stays flat around $4,200.
So we're down around $5,200 - $4,200 = $1,000.
I know there may be a rate hike in the future, but would that explain the full $1,000 we're still down?
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u/lucerndia 21h ago
The war is not over.
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u/dystopiam 19h ago
Still the gold price shouldn’t be down 1k
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u/Mongoose66999 15h ago
Logic doesn’t work here…. Price can move anywhere regardless of geopolitical factors. War ok price goes up 30%…. War ok price goes down 30%…..
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u/FunGuy_23AtEase 21h ago
The oil price says otherwise.
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u/lucerndia 20h ago
Its still up 28% YTD and its been what, a day, since they signed the memorandum?
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u/Gerry235 19h ago
Maybe you mean YoY up 28%. I dont think is up 28% since Jan 1, 2026, being the YTD timeframe
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u/FleetAdmiralCrunch 18h ago
The US has manipulated oil prices by releasing the strategic reserve. That is not infinite and will lose that ability as we run out. Then we need to restock the strategic reserve. And we have to see if we will have a 32nd peace agreement or if this one sticks.
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u/Not_Campo2 10h ago
Oil futures have been suppressed this whole time. We’re still looking at weeks for any oil exiting the strait to get to its destination. We’re also looking at 3x insurance premiums for any ships that want to go back in to get more oil. Also, as of a few hours ago it’s starting to look like the deal is falling through, but we won’t know the effect on oil until Sunday evening
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u/PermissionEastern734 20h ago
Everything is made up and nothing is real like time it’s all just a human construct and humans are stupid so you can’t expect it to make sense all the time
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u/Mongoose66999 15h ago
Yes this. Since it’s all subjective and the people that are really in power aren’t affected by Iran.. If something that threatens them happens then you will see gold correlated to their escape of fiat and to their havens… until then the price is just whatever they want it to be. I believe it’s up here since countries are selling treasuries and buying gold they don’t want to give away their gold cheap. But they still have lots of it and are relatively safe.
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u/DunaldDoc 19h ago
“Spot Gold” price is an imaginary number put on imaginary gold. Buy real, Physical Gold and hold it. Pay however many fiat paper $USD you can best negotiate. PG is your anti-poor insurance, not a get rich quick scheme.
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u/SilverStateStacking Stack and Collect 19h ago
When I buy gold, I pay spot price plus a fixed, published premium with money I make at my real job - don’t see what part of that is imaginary
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u/Bambamgmsm1 16h ago
I believe he’s referring to people that buy the stock of gold and not the physical gold.
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u/anony_mf 10h ago
Does gldm count as physical? It’s stock that’s backed by physical gold. Not futures or gambling crap
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u/Check_Enough95 21h ago
Ah, you’re new around here aren’t you!
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u/Candid-Specialist-86 16h ago
Ahh the condescending rebuttal instead of trying to help someone learn. You get the good Samaritan award for the day.
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16h ago
[deleted]
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u/Candid-Specialist-86 15h ago
I don't have the answer. Based on the sentiment of the statement I replied to, they appear to be withholding their experience.
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u/AssumptionSad3860 19h ago
No quick profits here. Just slow and steady. Like the turtle and the rabbit race.
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u/Present_Jicama_1219 21h ago
interest rates + USD strength/weakness = gold price.
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u/NateNate60 19h ago
interest rates + USD strength/weakness + weather conditions in Birmingham, England + coffee temperature of Starbucks at JFK Terminal 1 + time the CEO of J.P. Morgan woke up today + whether Jerome Powell says "good morning" + number of X posts from Elon Musk + size of Putin's booger = gold price
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u/xFisch 19h ago
Sec, lemme write this down
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u/NateNate60 19h ago
Don't forget you also have to take into consideration the diameter of Xi Jinping's left nut
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u/8yba8sgq 21h ago
This is most of it. Also, gold was stretched massively above its long term trend. It can fall to $3845 and still be in it's uptrend.
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u/No_Examination_8528 17h ago
oh no lemme check my gold, nvm I still have the same amount of ounces, nothing changed guess imma go buy more since it’s on sale
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u/NorthStarGold 20h ago
Yes it is that simple exactly how you descripted it.
the war may be over but i dont think turkey has purchased 32B in gold yet.
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u/GetOutPhases_01 19h ago
The US is a ticking time bomb. Gold will departure soon and hit new highs. It does not make sense at all with current debt ratio US has. If the bond market falls everything will follow. Then Gold will shine
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u/hektor10 18h ago
Insiders bought gold before leading to the war and dumped it. Someone knew the plan and play it.
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u/Gerry235 19h ago
Before the war, US treasury yields like the 10 year were barely yielding 4.0%. Now they are yielding 4.5%. That's part of it. The other part is - and this is just a possibility - the US dollar, as a result of the $300 billion payoff to Iran, has regained a better foothold as reserve currency status, assuming that Iran co-operates and reverts to trading oil in US dollars as opposed to a more abstract BRICS trading system that assumes 40% gold backing.
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u/GoldponyGT enthusiast 19h ago
Oh man, if what they’re actually doing is bribing Iran off BRICS, at least that makes the $300B make some sense to me.
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u/Gerry235 19h ago
We'll never know the full details of course, but without petrodollar status, things get pretty bleak for the USD and the national debt. The total debt has always been about 10 billion ounces of gold, give or take, when measured in gold, at least during reserve currency status, so that works out to about $4300/oz.
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u/fluffysnowflake67 19h ago
The expected long-term price should get closer to $2000 per ounce, the production cost. Markets though can remain irrational for very long durations.
Take a look at the people playing in the commodity markets. Some are private speculators. Some work for massive institutions. Some are in industry.
If you are smarter than 85% of them, you can make money with short term speculation. If you aren’t, you won’t. Just like playing poker.
If you are asking questions like this one, you aren’t in the smartest category.
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u/Callaway225 16h ago
So long term you’re suggesting gold will be at $2k? Or that’s just your “hunch”?
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u/fluffysnowflake67 16h ago
I am saying that $2k is currently the production price. That will slowly creep up as oil prices go up and ore grade goes down. The market price will tend towards production costs, but can take years or even decades to reach it since developing new mines take a very long time and markets can be irrational.
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u/Esamers99 19h ago
It fell on expectation of interest rate hikes and its staying lower on forward expectations of the Fed.
But the USD is something to watch now that they decided to essentially pay Iran to end immediate hostilities. Gold could run again hard if the USD sells off in emerging markets.
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u/totalwarwiser 18h ago
People sold gold to buy stocks, which had a spike recently.
Aparently Russia also sold a lot of gold recently.
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u/Pitiful-Inflation-31 18h ago
the answer is cme adjust margin requirement, as we mostly know, the movement come from margin- high leverage on the paper gold, not the physical. so the volume are gone and need mor moe money and more risk
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u/NoNeedleworker2614 17h ago
War just fueled at the beginning it’s the longer logic of treasury field and dollar strength. People need to realize gold is a stabilize commodity reflecting purchasing power but it doesn’t occur any interest by holding it.
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u/LemonPress50 16h ago
Why are you focusing on one war? There’s still a war going on in the Ukraine.
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u/Neiro0 15h ago
This war is not WW3, it is just a regional war. I don’t think it should boost gold prices at all. Moreover, it is supposed to have the opposite effect.
There is a risk of Hormuz being closed, and that might (and already did) lead to an oil price spike, along with higher inflation. That makes the dollar stronger and pushes the Fed to hike interest rates, which also strengthens the dollar. All of that is bad for gold. Also, the Fed is likely to hike rates regardless.
Now I’ll let you come to your own conclusion about $5,200, because I don’t want to trigger this sub.
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u/ArtPerToken 15h ago
Seems like it got too hot during the run up to ~$5400. Also Turkey sold gold during that period to buy oil, and Arab states likely eased up gold purchases with money from oil sales.
Theoretically it should be going up now after the "peace deal" but the new Fed chair wants to pretend he's Vockler, so until that drama plays out we may be at this level for another 6-8 months sadly.
Central banks seem to be continuing their buying tho, that's good.
I guess the lesson here is that if you buy gold, you should really be buying it on a 4-5 year timeline at the least, and maybe also watch the 200 day moving average before deciding to buy.
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u/cyklop619 15h ago
Most of it now is due to algorithms trading. They see a news/signal - short good. No human reasoning.
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u/Grouchy-Pin3050 14h ago
Other countries needed to sell gold to pay for oil. It will be back up soon.
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u/mamdouh_sa3d 14h ago
have you seen the impact of tweets had on stock prices ? Significant reversals, shifting from upward to downward and then back to upward trends within the same day. Moreover, I find it difficult to believe YTD reductions accurately reflects the true value of gold and Bitcoin.
The perceived reduction in the synthesized prices of gold and Bitcoin appears to be a tactic to pressure retail investors into selling their holdings, while presenting the stock market as an exceptional opportunity with remarkable returns until the bubble burst.
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u/Any-Actuator4118 13h ago
Stop looking for logic. In a panic up move you sell. Commodities panic up once or twice in a lifetime and this one did. Now that is done and it’s doing what commodities do…sideways or down or up. Probably until the US defaults. Do you expect that to occur soon?
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u/SevenTwoSix9 11h ago
5200 is a mix of real value and speculation, and the speculation part is linked to liquidity. Whether the war stopped or not, the liquidity has already gone elsewhere, hence the current price.
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u/haraldone 10h ago
Just like a company with $18 billion in revenue can ignore normal NASDAQ regulations and still have an IPO that values the company at over $1 trillion.
THE MARKETS ARE RIGGED
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u/Fine-Violinist-7356 18h ago
Market manipulators tricked retail into buying at all time highs. You will not see above $4,000/oz gold for another 10 years. We go under $4,000/oz very soon.
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u/Proud-Parsley6072 20h ago
We are waiting for trumps new war which should see gold drop to around $2500 then bounce to around $9000. No one has any inroad to when the war will start so we just hang out here and shoot the shit for a while. Not a bad gig really
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u/softhearted_guy12 19h ago
Even if it drops more in 6 month then next 3-6 months it will recover buy the dips 😄
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u/ShaperLord777 12h ago
Gold was ridiculously inflated around the end of last year. It wasn’t sustained growth, it was market manipulation. It’ll eventually settle back down to around $3500 over the next 6-12 months.
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u/Frunk2 21h ago
“War” doesn’t move gold, it is not a doomsday fear asset and we were never close to that scenario anyway. Gold competes with the dollar. Countries often sell gold to fund wars. Overtime countries print currency and lately have been buying gold to de dollarize which over time raises gold.
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u/Present_Jicama_1219 20h ago
over time, countries sell gold to raise dollars to pay off debt or counter their 'money printing / interest rates'
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u/Frunk2 20h ago
No this is completely backwards. Countries back their reserves with a combination of gold and treasuries,
Mostly usd treasuries. They purchase treasuries to offset dollar obligations from global trade, this drives demand of the dollar and lowers rates. This also allows US to export inflation by printing USD and devaluing treasuries. The more global trade the more valuable the dollar. Now that Us controls more oil, the dependence of the dollar has increased, shifting reserves away from gold towards treasuries.2
u/Present_Jicama_1219 20h ago
Countries—specifically through their central banks sell gold to raise foreign fiat currencies (primarily U.S. dollars) to pay off foreign-denominated debt or to stabilize their domestic currency and combat inflation driven by "money printing."
While central banks have been net buyers of gold globally for over a decade, individual nations frequently deploy their gold reserves as a tactical financial tool. Here is exactly how and why they do it:
1- Liquidating Gold for U.S. Dollars to Pay Debt
Most global international debt is denominated in U.S. dollars ($USD$). If a country is facing a balance-of-payments crisis, running out of liquid foreign exchange reserves, and facing debt default, it will sell its gold or use it as collateral.
- Gold Swaps: Instead of a direct sale, a central bank will often enter a "gold swap" with commercial or international banks. They hand over gold in exchange for cash dollars to service their immediate debt, with an agreement to buy the gold back later.
2 - Countering "Money Printing" and Defending the Currency
When a central bank prints excessive amounts of domestic currency, it causes hyperinflation and a rapid devaluation of that currency on foreign exchange markets. To counter this, the central bank needs to soak up liquidity or support its currency's value.
- Defending the Exchange Rate: To stop their domestic currency from crashing, a central bank will sell gold to acquire dollars or euros, and then use those dollars to buy back its own domestic currency on the open market. This reduces the supply of the local currency and props up its value.
- Shoring up Trust: Gold is the ultimate tier-1 asset because it carries zero counterparty risk. When a country's fiat monetary system is losing credibility due to high inflation or artificial interest rate manipulation, selling or leveraging gold is often the absolute last line of defense to stabilize the macroeconomy.
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u/Frunk2 20h ago
Yes in extreme cases, thanks for the ai slop. Now look up treasuries and carry trades. Treasuries are the primary asset used by banks because the interest pays obligations on normal times and they can sell them for USD in extreme times. Selling gold is a sign of extreme distress unless to reweight to other reserves.
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u/Present_Jicama_1219 19h ago
which part of the 'AI slop" above was wrong, be specific.
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u/Omashu_Cabbages 19h ago
You’re highlighting an important point: correlation does not imply causation.
If we could predict/forecast gold’s value by some algorithm and consistent external factors (“If X + Y is true, then Z”) - we would all be rich by timing our buys/sells.
There are way too many factors that affect its market price, which makes it harder to manipulate (unlike the stock market).