Something strange is happening in the market right now.

Oil just jumped 19% in 3 hours, yet gold dropped 2.75%.
They should be moving together. They are not. Here’s why.
Oil surging above $110 is stoking inflation fears, and that stronger dollar is putting pressure on gold.
Here’s the logic chain: Higher oil means higher inflation. Higher inflation means the Fed cannot cut rates. Higher rates for longer means a stronger dollar. A stronger dollar makes gold more expensive for the rest of the world, so they sell it.
But there is a second reason nobody is talking about.
In times of market stress, investors sell liquid assets—including gold—simply to raise cash.
When oil spikes this violently, funds face margin calls. The fastest thing to sell is gold because it is the most liquid asset they hold.
So gold is not dropping because it is weak. Gold is dropping because it is being sold to fund everything else.
The fundamentals for gold have not changed. The selling is mechanical, not structural.
#DYOR