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#夏日创作营 A guide to the real reason why gold, crude oil, and the US dollar are all rising
Over the past couple of days, in macro terms we’ve actually seen a rare phenomenon: gold, crude oil, and the US dollar are all rising together. As you know, for most of this year since the early March U.S.-Iran conflict, crude oil and gold have basically acted like a seesaw.
The logic was: once geopolitics goes to war, the Strait of Hormuz gets shut, oil prices rise, inflation rises, and gold falls.
These days, the U.S.-Iran conflict has tightened again. The United States has carried out airstrikes on Iran for 12 straight days, and oil prices have instantly surged to above $90. By rights, gold should fall. But strangely, while crude oil is going up, this time gold is rising along with it. It makes people feel like gold’s safe-haven appeal is back. So, has everything really come back?
First, the answer: This round of gold following the move is indeed about safe-haven demand. But what it’s avoiding is not the “risk” from geopolitics—it’s actually avoiding debt risk. This reflects current global worries about a sovereign credit crisis. To make this clear, we need to bring “US Treasuries” into the picture.
In recent weeks, the price of US Treasuries has kept falling, and US Treasury yields have been surging. You should know that the market has a widely accepted numerical indicator for whether US Treasuries are considered risky. For example, if the yield on 30-year Treasuries stands at over 5%. Or if the yield on 10-year Treasuries reaches over 4.5%. In such cases, the market generally treats it as the current Treasury price having fallen too much already, and if it’s left alone, liquidity risk will follow. In simple terms, the two indicators above are essentially warning signals.
So what’s the situation now? The warning light is almost flashing itself to pieces. The 30-year Treasury yield has been above 5% for 12 straight days. This year, in 27 trading days, the 30-year Treasury yield has been above 5%. You need to know that, in roughly 20 years since the 2007 financial crisis, this is the longest stretch like this.
Last mid-year, during the China-U.S. trade war and tariff war, US Treasury yields also spiked. But last year, every time the 10-year Treasury yield reached or was close to 4.5%, Trump would TACO. But this year, yields are surging like this, and Trump is still unmoved—he remains steadfast, doing things his way, striking whenever he wants. So, is it that Trump doesn’t want to?
No. The main reason is that the initiative in the current war situation is not something Trump actually controls. He wants to TACO, but he simply can’t TACO. What’s happening at the moment in the Strait of Hormuz is a full-on “coward’s game.” Whoever blinks first will have to give ground at the negotiation table afterward.
So, right now, both sides are busy trying to see who can be tougher. If you blow up my ship today, then tomorrow I’ll go blow up your bridge. If you blow up my bridge today, then tomorrow I’ll go blow up your data center. That’s why Trump can’t TACO. This also means US Treasuries have to “stand their ground” on their own. But the key is: if US Treasuries try to stand their ground purely by themselves, they can’t hold up. On one hand, the bond issuance volume is still increasing—for example, the U.S. government keeps issuing new debt. U.S. companies in artificial intelligence keep issuing bonds for financing too. On the other hand, the “pool of money” is only so big, and the Federal Reserve won’t cut rates, so money is being drained out little by little.
That’s why people start worrying about the sustainability of the bond market. This is how a bond credit crisis comes about.
When facing a credit crisis in US Treasuries, people start thinking: is there any asset that isn’t tied to any country’s sovereign creditworthiness? After looking around, the only one left is gold. That’s why gold has been rising recently. So, the current rise in crude oil reflects worries about energy. And gold’s rise reflects worries about the credit crisis. When they rise together, it’s because multiple macro events happen to “sync up” and produce resonance.
So, someone might ask: what happens next?
Most likely, there will be divergence.
Because whether it’s the dollar, US Treasuries, crude oil, or gold, their up-and-down moves are basically on the same chain of logic: if there’s war, oil prices are high, inflation runs hot, rate-hike expectations rise, which strengthens the dollar; a higher dollar pushes Treasury yields higher; a too-severe Treasury credit crisis then lifts gold.
But war is full of uncertainties. You should know that Trump is the one who has to fight.
On one hand, the earlier ceasefire memorandum did not define who actually controls the Strait of Hormuz—this is the focus of later negotiations. Fighting now creates bargaining chips for later talks.
On the other hand, if the U.S. doesn’t fight and easily compromises, it would damage America’s overall strategic interests and voice in the Middle East. Even the hardliners in domestic U.S. equities would think Trump is too soft. So, the war should be fought—but it won’t really be fought too violently, to the point of sacrificing his own life and wealth.
You can’t let a war blow up US Treasuries and cause a systemic financial crisis in the U.S.—that would be a lose-lose situation.
So how do you judge when it will fight and when it won’t? It’s simple: look at oil prices. Around 70, it “calls for war.” Around 100, it TACO. When oil prices are low, Trump goes all out. And when oil prices are high and inflation spikes, it will affect the midterm elections, and surging Treasury yields will also trigger worries about internal financial risks.
So a ceasefire and talks again becomes something that could happen at any time. And once there is a ceasefire, oil prices will fall back.
Then will gold fall too?
First, the answer: it may fall in the short term, but in the medium to long term it may not.
You should know that Federal Reserve new chair Kevin Warsh has, since taking office, already achieved multiple goals through “rate hikes with his mouth”:
1. In the short term, it temporarily lifted US Treasuries, thereby strengthening the dollar.
2. It suppressed the bubble in U.S. stocks, triggering deleveraging across global equity markets. But if it still shows such hawkishness, the marginal effect may diminish.
So at the end-of-month FOMC meeting, if there are no surprises, some changes may occur. If the market finds signs of rate cuts from Kevin Warsh’s comments at the meeting, then the US dollar index should pull back, and gold would be more likely to rebound. But if people really want gold to move in a more solid way, they need to wait until news of the Fed’s actual rate cuts is firmly put into effect. $XAUUSD
Over the past two days, in macro terms, we’ve actually seen a rare phenomenon: gold, crude oil, and the US dollar are all rising together. You have to know that for most of this year—since the US-Iran conflict at the beginning of March—crude oil and gold have basically been like a seesaw.
The logic is: geopolitics escalates into war, the Strait of Hormuz is shut, oil prices rise, inflation rises, and gold falls.
But these past two days, the US-Iran conflict has become tense again. The United States carried out airstrikes on Iran for 12 straight days, and oil prices surged instantly to above $90. Normally, gold should fall. But strangely, while crude oil is rising, gold this time is rising along with crude oil too—giving everyone the feeling that gold’s safe-haven appeal is back. So, is everything really back?
First, the answer: this gold “rise in tandem” is indeed for hedging. But it’s not hedging against the risk from geopolitics; what it’s really hedging is debt risk. What this reflects is the market’s current concern about a credit crisis among sovereign states worldwide. To explain this clearly, you need to bring “US Treasuries” into the conversation.
In recent times, the price of US Treasuries has been steadily falling, and US Treasury yields have been surging. You should know that there’s a widely recognized indicator in the market for whether US Treasuries have risk—such as 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 either situation as US Treasury prices having fallen too much, and if left unaddressed, liquidity risk may follow. Simply put, those two indicators are basically warning signals.
So what’s the situation now? The warning lights are basically flashing non-stop. The yield on 30-year US Treasuries has stayed above 5% for 12 straight days. In 2024 so far, there have been 27 trading days where the 30-year Treasury yield was above 5%. You have to know that this is the longest continuous stretch in the nearly 20 years since the 2007 financial crisis.
Last year, during the China-US trade war and tariff war, yields on US Treasuries also spiked unusually. But every time last year when the 10-year Treasury yield hit 4.5% or was about to get there, Trump would Taco. But this year, Treasury yields have been surging like this, and Trump is still unmoved—carrying on as usual, wanting to strike whenever he wants. So, is it that Trump doesn’t want to?
No. The main reason is that the initiative in this war doesn’t even lie in Trump’s hands. He may want to Taco, but he simply can’t Taco. Today, the Strait of Hormuz is essentially a full-on “chicken game.” Whoever blinks first will have to give ground at the negotiating table afterward.
So right now, both sides are busy trying to see who can be tougher. Today you blow up my ship, tomorrow I’ll blow up your bridge. Today you blow up my bridge, tomorrow I’ll blow up your data center. That’s why Trump can’t Taco. This also means US Treasuries have to “stand firm on their own.” But the key is that if US Treasuries try to stand firm purely on their own, they can’t hold out. On one side, the bond issuance volume is still rising—for example, the US government keeps issuing new debt. US AI companies also keep issuing bonds to raise funds. But on the other side, the pool is limited, and the Federal Reserve is unwilling to cut rates, so money is being drained bit by bit. That’s why people worry about the sustainability of the bond market. The bond credit crisis is born this way.
When facing the credit crisis of US Treasuries, the question everyone asks is: are there any assets that aren’t tied to the creditworthiness of any sovereign state? After looking around, the only one left standing is gold. That’s why gold has been rising recently.
So the current rise in crude oil reflects concern about energy. Gold’s rise reflects concern about the credit crisis. When they rise together, it’s essentially “macro events happening to resonate at the same time,” creating a combined impact.
So someone might ask: what happens next?
Most likely, there will be differentiation.
Because whether it’s the US dollar, US Treasuries, or crude oil and gold, their rise and fall basically follow the same logic chain: war breaks out, oil prices are high, inflation surges, which lifts rate-hike expectations, leading to a stronger dollar, which pushes up US Treasury yields; the US Treasury credit crisis becomes too high, which leads to gold rising.
But war is full of variables. You have to know that Trump is forced to fight.
On one hand, the previous ceasefire memorandum didn’t define who the Strait of Hormuz belongs to or is managed by—this is the focus of later negotiations. If war happens now, it becomes bargaining leverage later.
On the other hand, if the US were to compromise easily without fighting, it would damage America’s overall strategic interests and voice in the Middle East. Even the hawks in the US stock market would think Trump is too soft. So yes, it should be fought—but it won’t be fought so fiercely that it costs America its entire fortunes and lives.
You can’t allow fighting to break US Treasuries and cause a systemic financial crisis in the US—otherwise it would be not worth it.
So how do you judge when it’s going to fight and when it won’t? It’s simple: look at oil prices. Around 70, it “calls for war.” Around 100, it “TACO.” So when oil prices are low, Trump goes all out. But when oil prices rise and inflation surges, it not only affects the midterm election, but also triggers concerns about internal financial risks as Treasury yields spike.
Therefore, a ceasefire and talks can happen at any time. And once the ceasefire happens, oil prices will fall.
Then will gold fall as well?
First, the answer: in the short term, it may; but in the medium to long term, it may not.
You have to know that the new Fed chair, Kevin Warsh, since taking office, has already achieved multiple goals through “rate hikes using words”:
1. In the short term, it temporarily raised US Treasuries, which in turn pushed up the US dollar.
2. It suppressed the bubble in US stocks, triggering deleveraging across global stock markets. But once it continues to show such toughness, the marginal effects may start to diminish.
So at the end-of-month Fed meeting, changes are likely. If the market finds hints of rate cuts from Kevin Warsh’s comments at the meeting, the US dollar index should retreat, and gold would likely rebound more easily. But if you really want gold to move more solidly, you need to wait until news of actual Fed rate cuts is firmly in place. $XAUUSD