Gold Sinks to $4000 on Trump's Hormuz Tariff Ahead of US Inflation, Fed Testimony, Earnings

GOLD and SILVER fell hard on Monday at the start of a busy week for US inflation data, central-bank policy and corporate quarterly earnings reports, with the 'safe haven' yellow metal dropping near $4000 per ounce while crude oil jumped as both the US-Iran and Russia-Ukraine wars intensified.

Alongside Russian energy infrastructure and crude oil refining capacity, Ukraine has struck 105 so-called 'shadow fleet' tanker vessels in the past 8 days, Kyiv said Monday.

US President Trump meantime announced a 20% levy on any ship traversing the Strait of Hormuz, a vital waterway currently effectively shut by Iranian forces.

"Brent's gain now puts more of a focus on CPI [US inflation data due] this Tuesday," says precious metals strategist Nicky Shiels at Swiss bullion refining and finance group MKS Pamp,

Tomorrow also brings the first regular testimony from new Federal Reserve chair Kevin Warsh before the House Financial Services Committee of Congress.

Tuesday will also bring quarterly earnings reports from America's largest banks, led by J.P.Morgan Chase (NYSE: JPM), with the 'hyperscaler' US tech giants following next week and after.

Losing 1.8% and 3.6% respectively during Asian trading, gold and silver for London delivery didn't fall as hard as in Shanghai, where China's benchmark bullion auctions fixed at the lowest prices since the start of this month.

Crude oil more than reversed the previous 2 sessions' retreat, with September Brent futures nearing its highest in over 3 weeks at $79.75 per barrel, some 13.6% above pre-Iran war levels.

"Any perceived dovish lean [from Warsh could see] gold squeeze back toward $4200 resistance," says Shiels at MKS of tomorrow's Fed chair testimony.

"A reaffirmed hawkish tilt (probably his base case) keeps the $4000 retest alive."

Following this week's US banking and next week's hyperscaler earnings reports from Alphabet (Nasdaq: GOOG), Amazon (Nasdaq: AMZN) and then Microsoft (Nasdaq: MSFT), so-called "emergent hyperscaler" SpaceX (Nasdaq: SPCX) − which floated with the world's largest-ever capital event last month − will report in early August, while AI chip-making monster Nvidia (Nasdaq: NVDA) won't report until later next month.

Stock markets in Asia had fallen hard overnight Monday but European bourses steadied 1.8% below start-July's new all-time high on the EuroStoxx 600 index.

Japan's Topix index has now lost 2.3% from last week's fresh record, China's CSI300 ended today 7.2% below mid-June's 4-year high, and South Korea's Kospi index has sunk 25.3% from the same day's all-time peak, plunging by 8.9% on what local financial media are calling 'Black Monday'.

Samsung (KRX: 005930) has sunk 12.4% since this time last week, when it predicted a 19-fold jump in profits for the April-to-June quarter thanks to soaring demand for AI memory chips.

Semi-conductor maker SK Hynix Inc (000660:KRX) today lost 15.4% in Seoul after rising 14.1% in New York on Friday's US stock-listing debut, while US-headquartered competitor Micron (Nasdaq: MU) has now fallen 19.3% from its late-June record, cutting its year-to-date gains to 243.1%.

Falling $75 per troy ounce to $4045 during Monday morning's Asian trade, the price of gold for London settlement then sank another $40 mid-afternoon after US President Trump announced that the USA is reviving its blockade of all Iranian tanker traffic whilst also demanding a 20% levy on all cargo shipping through the Strait of Hormuz to cover "any and all costs necessary to do the job of providing safety and security to this very volatile section of the World."

Silver held firmer, dipping only to last Thursday night's lows beneath $58 per troy ounce.