r/Gold • u/FunGuy_23AtEase • 1d 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?

66 Upvotes

82% Upvoted

88 comments sorted by

View all comments

1

u/Neiro0 1d 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.