Noah Carter
Precious-metal markets have surged this month. Specifically, gold reached a new all-time high, with spot price surpassing US$3,860 / oz as of late September 2025. Meanwhile, oil prices slipped nearly 2% on increased supply expectations from OPEC + and a weaker demand outlook.
Background Context
The gold rally is rooted in multiple factors: expectations of the Fed cutting rates (which lowers opportunity cost of holding non-yielding gold), a weakening U.S. dollar and persistent geopolitical risks. On the flip side, crude-oil weakness comes amid supply-side easing (OPEC + production talk) and weaker global growth signals.
Why This News Matters
For commodity and precious-metal traders, this story is significant:
- Shift in safe-haven flows: When gold rises to record highs, it reflects broader macro-uncertainty. Central banks piling into bullion adds credence.
- Divergent commodity paths: Oil and gold diverging indicates a structural rotation: weaker growth (bad for oil) but high uncertainty (good for gold). That impacts inflation expectations, FX valuations and real-yield trades.
- Implication for inflation & policy: Oil weakness eases inflation pressure, but gold strength signals persistent risks. For traders in commodities CFDs, this means hedging via gold may prove timely while oil risk is more nuanced.
- Sectoral consequences: Mining companies (gold, silver) may benefit from strong prices; energy producers may face headwinds if oil stays weak. As commodity-linked stocks move, derivatives desks need to adjust exposures accordingly.
Our Expert Take
• Gold appears to be in a break-out phase
With price clearing US$3,800 and showing sustained momentum, the opportunity is for trend-followers. The combination of rate-cut expectations, dollar softness and safe-haven demand is powerful.
• Oil facing structural pressure
The slip in oil prices signals oversupply and weaker demand. The risk for energy-linked derivatives is skewed to the downside unless a clear supply shock emerges.
• Trading strategy note
Traders should consider long gold/copper pairs versus short oil, or use cross-commodity baskets to hedge. For gold miners, favourable. For oil producers, cautious.
• Macro outlook to monitor
- If the Fed cuts as expected and suggests further easing → gold could run toward US$4,000+ in the coming months.
- If global growth slows further → oil may test lower levels; gold could continue to benefit from safe-haven flows.
• Alert on technicals & momentum
Despite the rally, gold’s stretch suggests possible consolidation or pullback. If a “risk-on” switch happens, gold may correct temporarily. Traders should watch for gold funding-rate shifts, ETF flows and central-bank buying data.
In sum: Commodities are signalling a new regime—precious-metals strength co-existing with energy weakness. Traders equipped with cross-asset frameworks will be better positioned than those isolated within single-commodity views.
