Cheaper oil, dearer gold: markets can't agree on the risk

Equities kept climbing on soft US inflation data even as oil and gold both jumped on Middle East risk. That combination, not either market alone, is what deserves attention this week.

Abhineet RaiFounder · Wealth Adviser Week ending Friday 14 August 2026 About a four-minute read

The week in figures

Each figure as at its own date · sources below

Bank Rate 3.75% Unchanged14 Aug ECB refinancing rate 2.40% Unchanged14 Aug Fed funds target 3.50–3.75% Unchanged13 Aug UK 10-year gilt 4.94% +3 bps13 Aug US 10-year Treasury 4.68% +3 bps14 Aug US 2-year Treasury 4.17% −2 bps14 Aug GBP / USD 1.3537 +0.6%14 Aug GBP / EUR 1.1703 +0.4%14 Aug Brent crude $93.26 +6.4%11 Aug

UK CPI inflation 2.6% −0.2 pp30 Jun

The week's data pointed one way and the week's commodity prices pointed another, and both moves were real. US producer prices for July came in softer than expected, which is why the S&P 500 managed a third straight weekly gain, closing at 7,785.76, even as it slipped from a record high on Friday.1 Gold rose to $4,390.70 an ounce, up 1.3% on the week, while Brent crude closed the week at $93.26, up 6.4%, and WTI rose 6.3%.2 Natural gas moved further still, up 9.0%, to $2.79 per million BTU.3 None of that squares easily with a market that is meant to be relaxing about inflation.

What is happening, I think, is that two different questions are being asked at once. Equities are asking whether the Federal Reserve will need to raise rates again, and the answer this week was clearly no: the market now prices around a 69% chance of a hold in September, up from far lower a month ago, and the US 2-year Treasury yield fell to 4.17%, a move consistent with that repricing.4 The oil and gold markets are asking a different question, about the Strait of Hormuz and whether an energy shock now sitting underneath every inflation print eventually forces the question back open. Gilts and long Treasuries gave a small answer of their own: the UK 10-year rose to 4.94% and the US 10-year rose to 4.68%, both up on the week, which is not the pattern you would expect if the soft data were the whole story. A market pricing near-certain patience at the short end and demanding a bit more yield at the long end is not confused. It is holding two views that happen to be in tension, which is a more honest position than choosing one.

None of this changes what a portfolio built for this kind of uncertainty was already built for. A soft CPI print does not retire the energy shock, and a firm oil price does not retire the disinflation. What it does is confirm that the central banks meeting this autumn, and the minutes due from the ones that already have, are working from data that will keep sending mixed signals for a while yet. That is worth sitting with rather than resolving too quickly in either direction.

Abhineet RaiFounder · Wealth Adviser, Rai Wealth Management

Equities

US · UK · India

The S&P 500 closed the week at 7,785.76, its third consecutive weekly gain, helped by soft US inflation data and a rally in chip and technology names, even as it eased from a record high on Friday.1 The Dow lagged, falling on the week, while the Nasdaq added a little ground.5
The FTSE 100 fell for a fifth straight session to close at 10,750.11, its first weekly decline in five weeks.6 Miners led the fall, with Antofagasta down sharply after cutting its copper production guidance and Glencore also lower, while pharmaceutical heavyweights AstraZeneca and GSK both fell.7 Shell rose as oil prices firmed.8
India's Nifty 50 lost 0.83% on the week to close at 24,366.00, and the Sensex fell 0.6% to 78,009.25, as investors weighed inflation data, foreign outflows and the same regional tensions unsettling other markets.9

Rates & Fixed Income

UK · US

The US 2-year Treasury yield fell to 4.17% as traders raised the odds of the Federal Reserve holding rates in September to around 69%, from far lower a month earlier.4 That is the short end pricing a settled question.
The 10-year Treasury rose to 4.68% and the UK 10-year gilt rose to 4.94%, both firmer on the week, a move that sits awkwardly against the soft inflation data driving the short end lower.
Bank Rate and the Fed funds target both stayed unchanged this week, at 3.75% and 3.50–3.75% respectively, with neither the Bank of England nor the Federal Reserve due to meet again until next month.

Commodities

Gold · Oil & gas

Gold rose to $4,390.70 an ounce, up 1.3% on the week, holding near its highest level in ten weeks as softer US inflation data reinforced the case for the Federal Reserve to hold rates in September.2
Brent crude closed at $93.26 a barrel, up 6.4% on the week, and WTI rose 6.3% to $84.77, both driven by continued uncertainty over the Strait of Hormuz.10
Henry Hub natural gas rose 9.0% to $2.79 per million BTU, the sharpest move of the three.3

Currencies

GBP

Sterling rose against both the dollar and the euro this week, with GBP/USD at 1.3537 and GBP/EUR at 1.1703. The moves look more like dollar softness on the back of the US inflation data than a change in the story for the UK economy on its own.

What I'm Watching

The week ahead

FOMC minutes from the contentious 28–29 July meeting are due Wednesday, and matter because three officials dissented in favour of a hike, a split the market's current pricing may be underweighting.11
A wave of US retail earnings lands through the week, a useful check on whether soft producer price data is showing up yet in what companies are actually seeing from consumers.11
Reddit's entry into the S&P 500 this week is a reminder of how much index composition itself has been driving flows into large-cap technology.5

Sources

Market Snapshot figures from Bank of England, ECB Data Portal, New York Fed, US Treasury, EIA and ONS. Contains public sector information licensed under the Open Government Licence v3.0.

Abhineet Rai

Founder · Wealth Adviser, Rai Wealth Management

Abhineet founded Rai Wealth Management after more than two decades in banking, including spells as a Director in Private Banking at Credit Suisse, Bank of Singapore and HSBC Private Bank in London. He trained at the National Defence Academy in India before taking an MBA, and holds certifications in Investment Planning, Securities & Derivatives, and Regulated Mortgage advice.

20+ years in banking
Credit Suisse · Bank of Singapore · HSBC
NDA-trained, then MBA

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How this issue was prepared. The research and first draft were produced with AI assistance from primary-source data. Every figure was checked against its source before publication, and the commentary and the whole issue were reviewed, edited and approved by Abhineet Rai before it was sent.

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