Gold: Under pressure amid geopolitical artillery fire, the $4,000 mark sees repeated tug-of-war

On July 20, spot gold briefly fell below the $4,000 whole-dollar level during the day, with a low of $3,982.32 per ounce. It then rebounded to around $4,020 during the Asian trading session. In the previous week (July 13 to 17), international spot gold opened at $4,098.17 per ounce and closed at $4,016.55 per ounce; it fell by $102.72 for the week, a drop of 2.49%.

The escalation of geopolitical tensions failed to spark gold’s safe-haven appeal, instead weighing on it and pulling it lower. The key transmission chain is clear: the Iran–U.S. conflict lifts oil prices → inflation expectations heat up → expectations of Fed rate hikes strengthen → gold, a non-yielding asset, faces pressure. Data from the Chicago Mercantile Exchange shows traders estimate the probability of a rate hike in December has risen to 82%, higher than 73% last week. In congressional testimony, Fed Chair Waller said he has “zero tolerance” for high inflation, further reinforcing hawkish expectations.

Technically, the bearish pattern of gold’s moving averages on the daily timeframe remains in place. The near-term resistance is around 4,025, with the main pressure zone at 4,055–4,065. Key support below is at $3,940. Views among institutions are sharply split: Hua Lian Futures expects gold to trade in a weak, sideways range; Sprott Inc. believes gold prices could rebound toward the end of summer; and the World Gold Council expects that if the Fed hikes rates before October, gold will trade around $4,100. In the short term, the “seesaw” effect between gold and oil continues to weigh on gold, and the battle around the $4,000 level remains the key focus of the week.

Crude oil: Panic over the “cut” to the Strait of Hormuz sparks a surge, pushing oil prices above $90

In sharp contrast to gold’s weakness, the international crude oil market surged significantly due to the escalation of the Iran–U.S. conflict. In the early Asian session on July 20, Brent crude futures briefly rose above $91.42 per barrel, while WTI crude touched $84.6 per barrel. In China, the main domestic crude oil contract gained 6.86% intraday, to 550.8 yuan per barrel.

The direct trigger for this spike in oil prices was the Strait of Hormuz being closed again. According to reports from Iran Fars News Agency, strait shipping volume has fallen to zero; as long as the United States continues its provocative behavior, the strait will remain closed. A research report from China International Capital Corporation (CICC) noted that compared with the first closure at the end of February, the current global oil inventory buffer capacity has dropped markedly. Strategic reserves in OECD countries have fallen to their lowest level since 2003, meaning short-term elasticity of the crude oil risk premium is higher. Meanwhile, the Strait of Mandeb also faces closure risk, further intensifying concerns about supply disruptions.

On the supply side, crude oil production in the Gulf region is still in the early stage of recovery, and the restoration of fuel oil and LNG supply is slower. On the demand side, there is also restraint: the IEA forecasts that global oil demand in 2026 will fall year-on-year by about 1 million barrels per day, marking the first annual contraction since 2020. CICC maintains its view that the Brent oil price center in the third quarter will be $90 per barrel. In the short term, with geopolitical risks not resolved and low inventories providing support, oil prices should remain in a pattern of slightly bullish consolidation; however, weak demand may limit upside room.

Currently, gold and crude oil are showing a typical “seesaw” setup—geopolitical conflict boosts inflation and rate-hike expectations through the energy channel, which in turn suppresses gold’s safe-haven value. The crux of this divergence is that the market’s pricing focus has shifted from “safe-haven” to the “inflation–interest rates” transmission chain. Going forward, it will be important to watch the evolution of the Middle East situation, the Fed’s policy path, and inflation data; these three variables will determine gold and oil’s short-term direction. #夏日创作营