Gold drops below $4,000 per ounce as oil markets cool

Risk Warning: The information in this article is provided for general informational and educational purposes only. It does not constitute investment advice, a personal recommendation, an offer, or a solicitation to buy or sell any security, financial instrument, or product. Investing in equities, indices, ETFs, commodities and other financial instruments involves a significant risk of loss and is not suitable for every investor. Past performance is not a reliable indicator of future results. Cryptocurrencies and digital assets are highly volatile, may be unregulated in some jurisdictions, and can lose value rapidly and without warning.

The market’s go-to safe haven asset dropped below $4,000 per ounce on Thursday as investors and the market prices in a stronger U.S. dollar and a more optimistic outlook for the AI sector after semiconductor firm Micron’s robust quarterly earnings report (Q3 2026). 

The update comes amid expectations of a hawkish stance by the federal reserve and a further cooling of oil prices, which now sit firmly below $80. (Source: Oilprice.com)

• WTI Crude: $69.50 (-1.19%)
• Brent Crude: $72.65 (-1.48%)
• Murban Crude: $66.45 (-4.57%)

The dip in price of the commodity can be attributed to freer flow of tankers through the Strait of Hormuz which—while technically not open—now functions as an emergency shipping route more than a functional passage for oil and gas. (Source: Bloomberg)

Optimistic progress in negotiations between the U.S. and Iran and a stronger diplomatic presence of mediating parties has created a bearish outlook for oil, which, in the view of the SGFX research desk, may help ease inflationary pressures.

This is gold’s lowest price in six months since its record high in January of $5,600 per ounce. (Source: tradingeconomics.com)

American equities posted mixed results on Wednesday, with the following movements across indexes.

• S&P 500: 733.24 (-0.05%)
• NASDAQ: 710.62 (-0.42%)
• Dow Jones: 518.52 (+0.37%)
• Russell 2000: 296.69 (+0.46%)

Growth-focused ETFs such as tech and semi-conductors decreased in price by 0.62% and 0.31% respectively, while more defensive sectors such as utilities and consumer staples rose by 1.04% and 0.86%. (Source: TIKR terminal)

• Technology: (-0.62%)
• Health Care: (+0.77%)
• Real Estate: (-0.29%)
• Financials: (-0.30%)
• Utilities: (+1.04%)
• Communication Services: (-0.68%)
• Consumer Discretionary: (+1.15%)
• Consumer Staples: (+0.86%)
• Industrials: (+1.16%)
• Energy: (-1.63%)
• Materials: (+0.57%)
• Aerospace & Defense: (+0.11%)
• Biotechnology: (+1.93%)
• Medical Devices: (+1.02%)
• REITs: (+0.44%)
• Semiconductor: (-0.31%)
• Software: (-1.32%)

South Korean equities—particularly within semi-conductors and technology—rebounded as the market picked up on positive signals from companies. The Kospi, which lost 10% of its value in an earlier trading session, rose by 6% on Thursday. 

According to Bloomberg, several banks have cut their gold price forecasts. In the view of the SGFX research desk, this suggests that market expectations for a continued bull-run have diminished.

A stronger U.S. dollar often discourages investment in gold due to its more expensive value for investors with foreign currencies. 

Summary

In the view of SGFX research desk, a stronger dollar typically leads to weaker demand for gold as foreign currency investors looking to buy the asset for their portfolio now face a premium. The desk also anticipates a further hiking of rates for the remainder of the year to keep inflation muted. 

Research references

• Latest Oil Market News and Analysis for June 25 - Bloomberg
• Gold Steadies Near $4,000 as Stronger Dollar, Rate Outlook Weigh - Bloomberg
• Stock Market Today: Dow, S&P Live Updates for June 25 - Bloomberg
• TIKR terminal data
• CNBC data
• Bloomberg data
• Gold - Price - Chart - Historical Data - News

Disclaimer: This article reflects the views and analysis of the author at the time of publication and is based on information believed to be reliable from publicly available sources. Spectra Global makes no representation or warranty, express or implied, as to the accuracy, completeness, or timeliness of the information containedherein, and accepts no liability for any loss arising from reliance on it. Spectra Global is licensed by the UAE Securities and Commodities Authority (SCA) under Category 5 (Promotion). Nothing in this article should be construed as a personal recommendation or as an inducement to enter into any transaction. Past performance is not indicative of future results. SpectraGlobal has no commercial relationship with any company referenced in this article.