Former Head of JP Morgan’s Precious Metals Desk Robert Gottlieb breaks down the major correlation break between oil and gold & silver: 
“Major break in correlation between #Oil and #Precious Metals: what’s driving it?
Normally, when crude oil drops sharply, you would expect relief in precious metals as inflation fears ease, the USD softens, and rate expectations stabilize, however today we’re seeing the opposite.
Despite crude down nearly 5%, both #Gold (~2% lower) and #Silver (~3% lower).
So what’s going on?
A few factors stand out:
1. Higher-for-longer U.S. rates remain the dominant macro story
Even with crude lower today, the market remains focused on the bigger picture:
the Iran crisis has dragged on far longer than expected, keeping energy inflation concerns elevated and reinforcing the belief that the Fed will keep rates higher for longer.
That continues to pressure precious metals through higher real yields and a stronger USD backdrop.
2. India’s 15% import duty on gold is clearly weighing on physical demand.
India remains one of the most important physical gold markets globally, and the sharp increase in import duty has materially reduced demand. Local pricing has not fully adjusted to absorb the increased tax burden, resulting in discounts emerging instead of the normal premiums, a clear sign of weaker physical buying interest.
3. Major ETF liquidation continues Investor outflows remain a major headwind.
JP Morgan noted that GLD has seen over $9.5 billion in net outflows over the past 3 months, while The Bold Report showed ~170,000 ounces of gold ETF outflows over the past 7 days alone.
4. Major banks are cutting price forecasts That tends to impact sentiment, particularly among shorter-term macro and institutional participants.
5. Positioning continues to be reduced across the board This is not just a price story, it’s also a positioning unwind. Gold CME open interest is down ~24,000 contracts over the last 10 days Swap dealer and managed money positions continue to decline CME reported ~280,000 ounces of gold withdrawn yesterday
6. Investor fatigue
Markets are simply getting tired of the endless Iran headlines.
What initially looked like a short, contained geopolitical event has now dragged on for nearly 3 months, with repeated headlines around “imminent resolutions” that fail to materialize.
That fatigue appears to be reducing safe-haven conviction in the short term.
Bottom line: While I continue to believe precious metals resume their longer-term rally, this move looks more like a temporary pause and positioning reset, driven primarily by concerns around higher-for-longer U.S. rates and fading near-term investor enthusiasm.
Longer term, I still believe global geopolitical uncertainty, economic instability, central bank gold buying, and inconsistent U.S. policymaking remain constructive for the sector.
From a technical perspective, I’ll be watching whether the 200-day moving average around ~$4,340 spot gold continues to hold as an important support level.
Views are my own, for informational and educational purposes only, and not investment advice. Watchgold.org
