The inflation boomerang
Gold had a rough Monday. Prices fell sharply while the dollar index pushed higher, and the spark was a familiar market cocktail: weaker progress in U.S.-Iran peace talks, higher oil prices, and a fresh dose of inflation nerves.
Why the market cared
Oil moving up is basically the economy’s version of stepping on a rake. More expensive energy can feed into broader inflation expectations, and when that happens, traders tend to rotate away from some defensive trades and back toward the dollar.
Gold’s awkward moment
That left gold in the hot seat. The metal usually gets love when investors are hunting safety or inflation protection, but if the dollar is flexing and rates/inflation expectations are shifting around, gold can get shoved around fast.
- Dollar strength = pressure on gold
- Rising oil = more inflation anxiety
- Less geopolitical progress = more market whiplash
Big picture: this is less about one metal and more about the market remembering that geopolitics and inflation still like to crash the same party.