Oil plunges and gold steady: next big test is Warsh’s FOMC debut

Crude oil and gold have both seen significant moves this week as markets react to news that the United States (US) and Iran have agreed on the full text of a Memorandum of Understanding (MoU), with the deal scheduled to be signed in Switzerland this Friday, 19 June. Their reactions have contrasted sharply, with crude oil plunging while gold has surged. In this article, we examine why and what comes next.

WTI crude oil

West Texas Intermediate (WTI) crude oil finished sharply lower overnight at $76.66 (-5.59%), extending its weekly loss to a thumping 9%. The sell-off gathered momentum after confirmation that the agreement will allow Tehran to resume oil sales immediately – a faster-than-expected return of supply that has upended earlier expectations of a protracted reopening.

The rapid shift has been reinforced by reports that Iranian tankers have already been spotted departing after the two-month blockade. Meanwhile, dozens of Very Large Crude Carriers (VLCCs) are steaming toward the Strait of Hormuz ahead of Friday’s formal signing, ready to load and replenish supplies across Europe and Asia.

On top of this, fascinating details have emerged detailing how the US military has been quietly supporting Gulf exports throughout the crisis. Via coordinated ship-to-ship transfers, they managed to move tens of millions of barrels through the Strait since early May. This covert operation – which frankly has all the makings of a Hollywood blockbuster action movie – involved staggered transits, ‘dark’ ships operating without automatic identification system (AIS) transponders, and heavy aerial monitoring to keep crude flowing despite Iranian restrictions.

Crude oil technical analysis

This rapid fundamental shift has pushed WTI crude oil another 2.31% lower to $74.86 during today’s session.

This price action sees it testing a critical band of support between $75 (the 200-week moving average) and $73.50 (the 200-day moving average). Crude oil absolutely needs to hold this support zone on a sustained basis to rebound back towards $80 and to avoid a deeper slide back toward the $70 handle.

Crude oil daily chart

Gold

Gold finished higher overnight at $4331 (+0.52%), extending its gains from last week’s $4023 low.

The rebound has been well supported by the broader rally in equities. As we have noted recently, gold has been trading much more like a risk asset than a traditional safe haven, a shift largely driven by the massive increase in retail participation drawn in by the recent precious metals bull market.

On top of that, this week’s peace deal has resulted in lower oil prices, which naturally eases inflation fears. This has in turn led to lower yields, a softer greenback, and a dialling back of Federal Reserve (Fed) rate-hike expectations, all of which are inherently supportive for gold.

Overall, the commodities complex remains in flux. Crude is adjusting to the prospect of significantly higher near-term supply, while gold is balancing improved risk sentiment against potential hawkish signals from the Fed.

Gold technical analysis

In our early June note here, we warned that a sustained break below support at $4400 - $4360 would open the way to retest, and possibly break, the March low at $4098. That scenario played out shortly after, with gold falling to a low of $4023, a 28% correction from its all-time high near $5602.

The impressive rebound from $4023 has raised the prospect of a short-term, and possibly medium-term, low being in place. Confidence in this view would increase if gold can break above the 200-day moving average and downtrend resistance near $4450 - $4460. Until then, a retest of the October 2025 low at $3886 remains possible.

Gold daily chart

• _{Source: TradingView. The figures stated are as of 17 June 2026. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}