Severe Crosswinds: War in the Gulf, a Hawkish Fed, and Gold Holding at $4,015

Pilots train for the rare and demanding situation of severe crosswinds combined with shifting weather — when forces push the aircraft from multiple directions at once, and the pilot must read the whole sky to hold course. Gold is in exactly such conditions this Monday June 29. War flared in the Gulf over the weekend, a hawkish Fed is pressing from another direction, and oil has fallen to war-period lows. The result is gold holding near $4,015, down about 1.7% today — an aircraft buffeted from every side yet still flying. Reading these crosswinds correctly is the key to understanding where gold goes next.

The first crosswind is the Gulf conflict. Iran struck US bases in Kuwait and Bahrain over the weekend after US strikes on five Iranian targets, and hit ships in the Strait of Hormuz. Trump warned Iran “will no longer exist” if strikes continue. Normally this would be a powerful updraft, lifting gold on safe-haven demand. But this updraft has been weak, because the market expects the conflict to resolve — both sides resume talks in Doha tomorrow, and Iran says Hormuz will reopen within 30 days.

The second crosswind, blowing far harder, is the Federal Reserve. New Chair Kevin Warsh has reaffirmed the Fed’s commitment to fighting inflation, and after May PCE inflation came in at 4.1%, markets price roughly three rate hikes this year, with about a 60% chance of the first in September. This is the dominant wind pushing gold down, because a rising-rate environment reduces the appeal of non-yielding gold and strengthens the dollar.

The third crosswind is oil, and it is blowing in an unusual direction. Despite the Gulf conflict, oil has fallen to its lowest since the war began — Brent around $72

— because the market believes Hormuz will reopen. Falling oil eases inflation expectations, which reinforces the Fed crosswind rather than opposing it. Three winds, and two of the three are pushing gold down.

Now the navigation read. An experienced pilot knows that crosswinds are, by their nature, temporary — they shift. The Fed’s hawkishness is tied to inflation that is set to ease as oil stays low. The conflict could resolve at Doha tomorrow, or it could re-escalate, which would instantly turn the weak safe-haven updraft into a powerful one. Gold is being buffeted, but the structural engines that power its long-term flight are running at full strength: global bar-and-coin demand hit 474 tonnes in Q1 2026, the second-highest on record, and roughly 90% of central banks plan to keep buying. These engines did not fail in the crosswinds; they are holding the aircraft’s altitude near $4,015 even as the winds rage.

The destination, set by structural demand, has not changed — gold remains up 21.6% over the past year despite this month’s 10.5% decline. This week’s instrument readings are the US jobs report and ISM Manufacturing data. Weak data eases the Fed crosswind and clears gold to climb; strong data keeps the

pressure on. And tomorrow’s Doha talks could shift the conflict crosswind in either direction at any moment. Hold course, watch the instruments, and respect that crosswinds this severe rarely last.

24K: $129.50/gram | 22K: $118.70/gram

All prices USD. Monday June 29 indicative.