Spot gold prices climbed roughly 1.1% on Friday to approximately $4,843 per ounce, a move that defied conventional market logic. The catalyst was a ten-day ceasefire between Israel and Lebanon, brokered by the United States. In response, Iranian Foreign Minister Abbas Araghchi confirmed the Strait of Hormus would be reopened to commercial shipping for the duration of the truce. Typically, such geopolitical de-escalation pressures haven assets, but gold advanced.
This paradoxical reaction stems from deep-seated market skepticism. Participants doubt the diplomatic progress will last. The prospect of potential talks between Washington and Tehran this weekend is maintaining a risk premium across the commodity sector. Furthermore, US President Trump welcomed the strait’s opening but simultaneously reaffirmed that the naval blockade of Iranian ports remains in “full force” until a peace deal is finalized. The gap between signal and substance is supporting prices.
Concurrently, robust US economic data presented a headwind. A strong Philadelphia Fed Index and low initial jobless claims bolstered the dollar and bond yields, factors that usually dampen gold’s appeal. This time, they were overshadowed by underlying physical demand. The metal closed the week with a 0.8% gain, marking its fourth consecutive weekly advance. Since early April, gold has added around three percent, though it remains well below its all-time high of $5,595 from January 29.
The immediate market response highlighted a clear divergence: oil prices fell by more than ten percent on the news, offering short-term relief from inflationary pressures. Approximately 20% of globally traded oil transits the Strait of Hormus in peaceful times. However, the energy backdrop remains precarious. IEA Director Fatih Birol warned on Thursday that Europe has only about six weeks of kerosene supplies left, keeping pressure on energy trade and preserving the threat of stagflation—an environment historically favorable to safe havens like gold.
Should investors sell immediately? Or is it worth buying Gold?
Institutional activity paints a mixed picture. The GLD exchange-traded fund has seen outflows of around $360 million this month. Despite this, its physical holdings increased by approximately 4.5 tonnes. Rising prices alongside capital withdrawals indicate a fragmented investor stance. This is occurring as the private credit sector reports more non-performing loans in 2026, a sign that heightened market volatility is taking a toll.
The foundational support for gold, however, remains unwavering. World Gold Council reports confirm central banks continued adding to their gold reserves at an elevated pace in the first quarter of 2026. This structural, institutional demand provides a buffer against short-term fluctuations, regardless of whether headlines signal escalation or calm.
Technically, analysts now identify a resistance zone between $4,855 and $4,910. A decisive break above this band would solidify the uptrend in place since March. In the coming days, Eurozone inflation data and new details from the Middle East negotiations will be key. If geopolitical uncertainty persists alongside steady central bank buying, the resistance area near $4,900 will become the critical level to watch.
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