Crude oil prices above $120 shift gold from a safe haven to a policy risk

Gold prices could slip below $4,400 and silver below $67 if crude oil sustains above $120 per barrel. This price level for crude fuels inflation and increases input costs across global economies. Spiking inflation expectations force central banks, including the Federal Reserve, to maintain higher interest rates for longer. Higher rates increase the opportunity cost of holding non-yielding assets like gold and silver, making yield-bearing assets more attractive. This monetary environment strengthens the US dollar, which makes bullion more expensive for global buyers and reduces demand. Gold has already corrected over 8% since the start of the US–Iran war, while silver has plunged more than 16%.