Geopolitical De-escalation

The sudden shift in diplomatic tone has prompted traders to unwind the 'panic premium' built into precious metals over the last ten weeks. The potential reopening of the Strait of Hormuz has significantly lowered benchmark oil prices, dragging gold down with it.

Inflation and Federal Reserve

Despite the drop, gold remains structurally supported by the inflationary damage already done during the conflict. The presidents of the Chicago and St. Louis Feds warned that inflation remains sticky, signaling that interest rate cuts may be delayed, which caps immediate upside for non-yielding assets.