#夏日创作营 One article to help you understand the truth behind gold, crude oil, and the US dollar all rising

Over the past couple of days, in macro terms, a rare phenomenon has actually appeared: gold, crude oil, and the US dollar have all risen together. You have to know that this year, since early March after the US-Iran conflict, for most of the time, crude oil and gold have basically been a seesaw relationship.
The logic is: when a geopolitical war breaks out, the Strait of Hormuz is sealed, oil prices rise, inflation rises, and gold falls.
In the past couple of days, tensions in the US-Iran conflict have surged again. The United States has launched airstrikes on Iran for 12 consecutive days, and oil prices have instantly surged to above $90. By rights, gold should fall. But strangely, while crude oil is rising, gold this time is also rising along with it. It gives everyone the feeling that gold’s safe-haven attribute has returned. So, has everything really come back?
First, the answer: this round of gold rising alongside oil is indeed about hedging. But what it’s hedging is not the risk of geopolitics—it’s actually hedging debt risk. What’s reflected here is global concern over a credit crisis for sovereign states. To explain this clearly, you need to bring “US Treasuries” into the discussion.
Recently, the price of US Treasuries has been steadily falling, and US Treasury yields have been soaring. You have to know that the market has a commonly recognized indicator for whether US Treasuries are risky. For example, when the yield on 30-year US Treasuries stands above 5%. Or when the yield on 10-year US Treasuries reaches above 4.5%. The market will interpret this as the US Treasury prices having fallen too much already, and if this is ignored, it will create liquidity risk. In simple terms, the two indicators above are essentially early warning signals.
So what’s the situation now? The warning lights are almost flashing themselves to death. The 30-year US Treasury yield has stayed above 5% and hasn’t dropped for 12 consecutive days. In this year alone, out of the 27 trading days, the 30-year US Treasury yield has been above 5%. You have to know that this is the longest stretch in nearly 20 years since the 2007 financial crisis. During last year’s China-US trade war and tariff war, US Treasury yields also spiked, but whenever the 10-year US Treasury yield reached or was about to reach 4.5% last year, Trump would TACO. But this year, with US Treasury yields soaring like this, Trump is still indifferent, sticking to his ways—if he wants to fight, he fights. So, is it that Trump doesn’t want to?
No. The main reason is that the initiative in the current war doesn’t actually lie in Trump’s hands. He wants to TACO, but he’s basically powerless to TACO. Right now, the Strait of Hormuz is basically a full-on “coward’s game.” Whoever backs down first has to make concessions at the negotiation table later on.
So, both sides are currently busy trying to outdo each other in how harsh they can be. Today you blow up my ship, tomorrow I’ll go blow up your bridge. Today you blow up my bridge, tomorrow I’ll go blow up your data center. That means Trump can’t TACO. This also implies that US Treasuries have to carry the burden on their own. The key, however, is that if US Treasuries have to “hold on by themselves,” they can’t withstand it. On one side, the issuance of bonds is still continuously increasing—for example, the US government keeps issuing new debt. Those US artificial intelligence companies are also issuing bonds for financing. But on the other side, the pool of money is just that big. The Federal Reserve refuses to cut rates, and money is being drained little by little. So people worry about the sustainability of the bond market. This is how a credit crisis in bonds forms.
When faced with a credit crisis for US Treasuries, what people think about is whether there are any assets that are not tied to the sovereign credit risk of any country. After looking around, the only thing left is gold. That’s why gold has been rising recently. So, the current rise in crude oil reflects concerns about energy. And gold’s rise reflects concerns about the credit crisis. Their simultaneous rise is a “resonance” created when multiple macro events happen to line up at the same time.
So someone asks: what will happen next?
Most likely, there will be divergence.
Because regardless of the US dollar and US Treasuries, or crude oil and gold, their rise and fall is basically on the same logic chain: there’s a war, so oil prices are high and inflation is surging, which raises rate-hike expectations, thereby strengthening the US dollar, which pushes up US Treasury yields; with the credit crisis for US Treasuries too severe, gold rises.
But the act of war is full of variables. You have to know that Trump is forced to fight.
On one hand, the earlier ceasefire memorandum did not define who the Strait of Hormuz actually belongs to—this is a focus of subsequent negotiations. If they fight now, they will have bargaining chips later.
On the other hand, if the United States doesn’t fight and compromises too easily, it would damage the United States’ overall strategic interests and right to speak in the Middle East. Even the hardliners in US domestic markets would think Trump is too soft. So the fight should happen—but it won’t really be fought too aggressively, even to the point of risking one’s own entire fortune and life.
You can’t let the war wreck US Treasuries and cause a systemic financial crisis in the US, making everything not worth the loss.
So how do you judge when it will fight and when it won’t? It’s simple—watch the oil price. Around 70, it screams “fight.” Around 100, it TACO. So when the oil price is low, Trump fights to his heart’s content. But once oil prices rise and inflation surges, it will both affect midterm elections and also spark internal financial risk worries through soaring US Treasury yields.
So the idea of “ceasefire and then talks” becomes something that could happen at any time. And once there is a ceasefire, oil prices will fall back.
Will gold also fall along with it?
First, the answer: in the short term, it might, but in the medium to long term, it might not.
You have to know that since Kevin Walsh, the new chair of the Federal Reserve, took office, through “raising rates with words,” he has already achieved multiple objectives:
1. In the short term, he temporarily boosted US Treasuries, thereby pushing the US dollar stronger.
2. He suppressed the bubble in US equities, triggering global stock market deleveraging. But once he still signals such toughness, the marginal effect may diminish.
So at the end-of-month Federal Reserve meeting, if nothing unexpected happens, some changes may occur. If the market finds any signs of rate cuts from Kevin Walsh’s remarks at the meeting, then the US dollar index should fall back, and gold may be more likely to rebound. But if you truly want gold to move more solidly, you need to wait until credible news that the Federal Reserve actually cuts rates takes hold. $XAUUSD ‌