Gold Slips 2% as Brent Crude Tops $100, Fed Rate-Cut Odds

Gold pulled back sharply on Thursday as surging oil prices reignited inflation fears and pushed Treasury yields higher, reversing two days of technical gains that had lifted bullion off its $4,000/oz support zone.

Key market moves (as of settlement, per Investing.com data):

→ Spot gold: fell 2% to $4,049.56/oz, after rallying roughly 3% over Tuesday-Wednesday

→ Gold futures: declined 2.4% to $4,052.40/oz

→ Brent crude: topped $100/barrel for the first time since May 26

Oil supply concerns remain in focus: Iran-backed Houthi forces claimed responsibility for strikes on two Saudi Arabian tankers in the Red Sea this week. Per Kpler shipping data, this exposes an estimated 1.9 million barrels/day of Saudi west-coast refining capacity to further attack risk, while confirmed Strait of Hormuz vessel crossings have dropped 75% amid escalating U.S.-Iran tensions.

Fed rate expectations have shifted sharply (CME FedWatch tool):

→ Odds of a July 29 rate hold: fallen to ~66%, down from ~88% a week ago

→ Odds of a quarter-point hike: risen to ~34%, up from ~12% a week ago

Key technical levels highlighted by analysts, per David Morrison, Senior Market Analyst at Trade Nation: Mild support near $4,080/oz may provide an area of technical support, while a move above $4,200 could be viewed by some market participants as strengthening the bullish technical outlook. Continued dollar strength, however, remains a factor influencing market sentiment.

Positioning signal: ANZ analysts noted non-commercial net long gold positions have climbed to their highest level since January, with renewed ETF inflows suggesting investors are using bullion to hedge against stretched equity valuations, even amid the elevated-rate outlook.

Market implications: A hawkish Fed repricing typically pressures non-yielding assets like gold while strengthening the dollar. Market participants are likely to continue focusing on the $4,080 support and $4,200 resistance areas, while developments surrounding Red Sea shipping disruptions may remain relevant to inflation expectations ahead of the July 29 Fed decision.

Source: Investing.com market data; Kpler shipping data; CME FedWatch tool; ANZ Research; compiled from Investing.com reporting (Anuron Mitra).Gold pulled back sharply on Thursday as surging oil prices reignited inflation fears and pushed Treasury yields higher, reversing two days of technical gains that had lifted bullion off its $4,000/oz support zone.