Rising oil prices and delayed Fed rate cut expectations increase carry costs, pressuring gold and silver positioning.
Gold prices remain near support at $3,900 per ounce as investors reduce long exposure amid higher oil prices and shifting Fed policy expectations. Escalating US-Iran tensions threaten disinflation progress, pushing markets to price in a potential late-2026 rate hike.
Speculative length in gold and silver has declined, with money managers cutting positions due to rising yields and a stronger US dollar. Higher carry and opportunity costs are expected to limit upside, while weakening industrial and investment demand adds downward pressure.
The firming dollar and elevated yields continue to weigh on bullion, with further erosion in long positions likely in the near term.