The deal lasted 21 days. Oil surged. Gold fell. War is back and it's not bullish for metals

THURSDAY MARKET UPDATE

The deal is dead. Trump said the ceasefire with Iran is “over” and “a waste of time” at the NATO summit in Ankara yesterday. US and Iran are exchanging airstrikes for a second straight day. Oil surged 6%. Gold fell to $4,067 — because higher oil means higher inflation means hikes stay on the table. The FOMC minutes confirmed the hawks lead 9-8. PepsiCo reports this morning. CPI tomorrow. Everything just changed again.

• 🟥 | Trump: ceasefire is “over” — US and Iran exchanging airstrikes; Hormuz shipping slowing again; oil surged 6%.
• 🟥 | Gold fell to $4,067 — war drove oil up, not gold up; the inflation-hike mechanism crushed metals again.
• 🟥 | FOMC minutes: hawks lead 9-8 — inflation forecast revised UP to 3.6% PCE; BofA cut gold target 14%.

Gold & Macro

THE DEAL DIED. GOLD FELL. SAME TRAP

Gold dropped to $4,067 yesterday. The Versailles deal is dead. Trump called it “a waste of time” at the NATO summit in Ankara. US and Iran are bombing each other again. Oil surged 6%. And gold fell. Again. The same mechanism that punished gold during the original war is back: conflict → higher oil → higher inflation expectations → hike odds rise → gold drops. War isn't bullish for gold when war causes inflation.

The FOMC minutes confirmed what we suspected. Hawks lead 9-8 on hiking this year. The committee revised its PCE inflation forecast from 2.7% to 3.6% — a massive hawkish shift. BofA cut its 2026 gold average forecast 14% to $4,360. Silver crashed to $58.45. The payrolls-driven rally from last week is completely erased.

Tomorrow's CPI is now the most important number of the summer. If June CPI confirms disinflation despite oil — gold finds a floor. If CPI is hot — $3,800 is the next stop. The war just reset the entire second half.

The Trade

OIL SURGED 6%. PEPSI REPORTS. THE WAR IS BACK

PepsiCo reports before the bell. Consensus: $2.19 EPS on a 3% revenue decline. Multiple analysts cut targets ahead of the print. Nike already warned that retail is “not normal.” General Mills missed and cut guidance. Constellation cut forecasts. If Pepsi confirms the pattern, consumer staples — the last defensive pillar — start cracking.

But the bigger story is the war restarting. Oil surged 6% yesterday. Hormuz shipping is slowing again. If oil stays above $75, the disinflation pipeline that was supposed to save H2 breaks. That means Warsh hikes. That means tech multiples compress. That means the entire Q2 rally narrative — “deal plus AI plus falling oil” — loses one of its three legs. Futures are down 1% pre-market. The VIX spiked to 21.

What to watch:

Today before open: PepsiCo Q2. Today: jobless claims. Tomorrow 8:30am: June CPI — the number that now carries double the weight with oil surging. Monday: JPMorgan and Goldman Q2 earnings kick off bank season.

Heat Check

Nathan’s Take

“The Versailles deal lasted 21 days. Gold fell on the war that started it, fell when the deal was signed, and fell again when the deal collapsed. The safe haven that can't catch a bid during any of those three events isn't broken. It's just not listening to geopolitics anymore. It's listening to rates”

Names to Know

EXXON, LOCKHEED, PEPSICO

Exxon Mobil $XOM (▲ 4.8%) — surged as oil jumped 6% on Trump's ceasefire collapse; energy is the trade when war returns.

Lockheed Martin $LMT (▲ 3.5%) — defense stocks rallied immediately on war escalation; the peace dividend just evaporated.

PepsiCo $PEP (reports today) — consensus $2.19 EPS; analysts already cut targets; the consumer stress test continues after Nike and General Mills missed.

Chevron $CVX (▲ 3.9%) — rose with the oil complex; Hormuz shipping disruptions returning means energy earnings get upgraded.

Halliburton $HAL (▲ 5.1%) — oil services surging as Hormuz disruptions return; when war restarts, the companies that drill and service wells rally first.

For real-time data, I recommend monitoring Finviz.

The Macro Edge

💣 | Trump at NATO: ceasefire is “over” and dealing with Iran is “a waste of time” — US revoked Iranian oil export waivers; tankers hit in Hormuz.

🏛️ | FOMC minutes confirmed 9-8 hawk split — PCE inflation forecast revised sharply up from 2.7% to 3.6%; hawkish lean stronger than expected.

📊 | BofA cut 2026 gold forecast 14% to $4,360 average — still sees $5,000 once the tightening cycle ends; short-term bearish, long-term intact.

🇨🇳 | PBoC bought 14.93 tonnes of gold in June — largest single-month purchase since October 2023; 20 consecutive months of buying.

📅 | Tomorrow: June CPI at 8:30am — the most important inflation print of the summer just got even more important.

CPI tomorrow at 8:30. The deal is dead. The war is back. Oil is surging. This is not the summer we planned for.

Nathan Reed | Profits & Insights