📊 Weekly Instrument Breakdown | GC | Macro & Geopolitics

Once again, gold finds itself caught between two opposing forces.

On the one hand, geopolitics should support GC: the US and Iran are back in focus, the Middle East remains the market’s primary source of geopolitical risk, and traders are pricing in a premium for oil, the Strait of Hormuz, and potential supply disruptions.

On the other hand, that same geopolitical backdrop is currently weighing on gold through inflation risk.

If oil prices surge again amid an escalation of the military conflict, this would reinforce already persistent inflationary pressure in the US. As the probability of rates remaining higher for longer or even hints of a hike increases, the dollar strengthens and gold prices come under renewed pressure.

Key Drivers for the Second Half of July

1. The Fed and Kevin Warsh

The change in Fed leadership is one of the most important factors for gold this summer.

Kevin Warsh is already trying to signal that the Fed will not simply follow Trump’s political preferences and will remain data-dependent. For gold, the key question is whether the new Fed will ultimately lean dovish or hawkish.

On the one hand, US inflation data has come in softer than the market feared. On the other, oil and geopolitics could push inflation expectations higher again.

If the Fed stresses the need to keep rates elevated or even considers further hikes, that would weigh on GC futures and could send prices below the 3,800 level.

2. Iran, the US, and July Geopolitics

At the moment, gold is being sold through the rise in yields.

In other words, escalation on its own does not guarantee higher gold prices. For a strong bullish scenario, yields need to decline alongside the geopolitical risk - not rise.

The strongest setup for GC would be more than just higher oil prices. It would require a full risk-off move in which investors buy both Treasuries and gold at the same time.

3. Oil, Inflation, and Real Rates

Oil has become the link between geopolitics and the Fed.

If oil remains elevated, the market will fear another acceleration in inflation. That limits the Fed’s ability to cut rates and keeps real yields supported.

For gold, this is an uncomfortable combination.
GC does not pay a coupon, so when real yields rise, investors are more likely to rotate into cash, bonds, or other dollar-denominated instruments.

This is why a decline in real rates is critical for a sustained recovery in gold.

5. Central Banks and Long-Term Demand

Gold’s long-term fundamental story remains strong.

Central banks continue to view gold as a reserve-diversification asset, particularly in a world where sanctions, geopolitics, and confidence in the dollar-based system are becoming increasingly important themes.

This does not always support GC over the course of a single week, but it does create a fundamental bid on deeper pullbacks.

That is why gold can fall when yields rise, while every meaningful correction still attracts medium-term demand.

Macro Bottom Line

GC is currently caught between two opposing forces:
📈 Long term: geopolitics, central-bank demand, fiscal deficits, and questions surrounding the dollar-based system continue to support gold;
📉  Short term: oil, inflation risk, a hawkish Fed, a stronger dollar, and higher yields continue to weigh on price.

The key question for July 17–24 is:

Will the market treat Iran as a safe-haven trigger or as an inflation shock?

The answer to that question together with the Fed meeting at the end of July - will determine whether gold can reclaim $4,000–4,030 or move deeper toward $3,900–3,850.

We’ll break down the technical levels and scenarios in more detail in the second post.

📈 Technical Outlook | GC | Gold

💡Core Scenarios for the Second Half of July

Scenario 1 — Base Case: Consolidation Ahead of the Fed Meeting
Probability: 40%
Base case: GC attempts to hold the $3,960–4,000 area and build a rotation higher toward $4,067–4,080. This is the first major resistance zone, and without meaningful support from the macro backdrop, price is likely to roll over again from this area.

Confirmations for this scenario:
😀 GC holds $3,975–4,000
😀 The dollar stops rising
😀 US yields do not make new local highs
😀 The Fed does not intensify its hawkish rhetoric
😀 Oil stabilizes
😀 News related to Iran does not trigger another inflation shock

If price establishes itself above $4,035, the next target is $4,067–4,080.

Scenario 2 — Bearish: A Break Below $3,975 and Further Downside
Probability: 45%
This scenario becomes active if the market continues to sell gold in response to rising real rates. A break below $3,975 could open the way toward $3,925–3,900, followed by $3,800–3,780.

The key triggers for this scenario are:
😀 oil begins rising again because of Iran / the Strait of Hormuz
😀 the market interprets this as an inflation shock
😀 the 10-year US Treasury yield moves higher
😀 the dollar strengthens
😀 Warsh / Logan / Jefferson / Waller strike a hawkish tone
😀 the market begins pricing in the possibility of another rate hike
😀 COT long positions begin to decline

Under this scenario, gold could fall even amid negative geopolitical developments, because the dominant factor would not be fear, but the cost of holding dollars.

Scenario 3 — Bullish Shock: A Return of the Safe-Haven Bid and a Break Above $4,080
Probability: 15%
This scenario becomes possible if the market rapidly shifts from an “inflation shock” regime into a “risk-off protection” regime.

What could trigger this scenario:
😀 a sharp deterioration in the situation between the US and Iran
😀 threats involving the Strait of Hormuz or Red Sea shipping routes
😀 a military incident
😀 a sell-off in the equity market
😀 Treasury buying accompanied by lower yields
😀 the dollar fails to gain strong upside momentum
😀 investors return to gold as a protection trade

From a technical perspective, the key development would be acceptance above $4,080. If price establishes itself above this zone, the next target is $4,100–4,165.

Bottom Line:
From a long-term perspective, the structure remains bullish: central-bank demand, geopolitics, fiscal deficits, sanctions risk, and concerns surrounding the dollar-based system have not disappeared.

In the short term, however, GC is trading under the pressure of renewed inflation fears and the prospect of interest rates remaining elevated.

📊 ATAS Weekly Market Outlook

What could move the markets this week and which scenarios are worth watching? In this 15-minute weekly overview, Anastasiia breaks down the key levels, market structure, and potential trading scenarios for:

😀US stock index futures: ES & NQ
😀Gold futures: GC
😀Currency futures: 6E & 6B
😀Bitcoin

You’ll see the main bullish and bearish scenarios, important reaction zones, and the conditions that could confirm each setup.

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