The War Premium Is Officially Dead
Oil Futures are on course for a third consecutive day of losses, with oil futures (CL1!) trading around $67.80 during Thursday's U.S. session as supply anxieties ease.
The scale of the unwind is historic: The 20% slide in oil futures in June marked its worst month since late 2021.
The physical market is confirming what price action suggested: Hormuz tanker traffic is recovering as tensions ease. Qatar, which is mediating indirect talks between the United States and Iran, said the two sides made positive progress in discussions focused on maritime traffic and security in the Strait of Hormuz.
According to analysts at ING, a slight uptick in inbound tanker traffic suggests that shipowners are gaining confidence about moving vessels into the Persian Gulf. The bank noted that if this trend accelerates, it could present a significant headwind and directly challenge their forecast for rising oil prices.
With Kuwait's force majeure lifted and Gulf producers racing to load cargoes, the conflict premium that once carried oil futures near $120 has been fully extracted.
The next crude catalyst is structural, not geopolitical: Iraq has demanded a higher production quota and told OPEC it could leave if demands are not met, a live threat given the UAE already exited the cartel in May.
Given the developments, it still appears that the path of least resistance remains to the downside.
However, a word of caution as oil futures have crossed over into oversold territory — a short-term bounce could be in the cards.
Oil Futures Four-Hour Chart, July 2, 2026
Source: TradingView
For more on the performance of oil and an outlook moving forward, read After a 20% June Rout, Where Does Oil Go From Here?
Gold: From Eight-Month Lows to a Potential Base
Here is where the transmission mechanism kicks in. Falling oil tempers inflation worries, boosting bets the Fed can adopt a less restrictive stance and that repricing found rocket fuel in Thursday's jobs report.
June payrolls rose just 57,000 against expectations of 115,000, and the 2-year Treasury yield fell as traders bet the Fed will hold off hiking.
Gold responded immediately, jumping 2.4% to $4,157/oz, its highest since June 23, a striking reversal from earlier this week, when the bullion plunged below $4,000 to eight-month lows.
Federal Reserve Chair Kevin Warsh set the stage at Sintra, saying inflation expectations had eased over the past month, suggesting no urgency to raise rates.
The question now becomes whether gold has formed a base at the $4,000/oz handle and whether this could be the start of a new rally?
Gold Futures Four-Hour Chart, July 2, 2026
Source: TradingView
Looking at the four-hour chart, it does appear as Gold has formed a base.
It would appear gold has printed a triple bottom pattern which precedes a reversal and has since gone on to print higher highs and higher lows.
There is immediate resistance presented by the 100-day MA resting at $4,167. A break above the level could bring the 200-day MA at $4,326 into play.
A rejection at the 100-day MA may present a better opportunity for potential bulls to get involved.
However, a four-hour candle close below the swing low at $4,044/oz would invalidate the bullish narrative.
