Gold posted a sharp overnight advance, making it the standout performer across major assets. Spot gold rose to an intraday high of $4,328.20 an ounce and settled at $4,308, up 4.20% on the day, or $173.80. It was the metal’s biggest single-day gain in five months.
The move also carried technical weight. Gold broke above a descending triangle pattern that had constrained prices for more than six weeks and climbed back above both its 20-day and 50-day moving averages. That combination left traders watching $4,400 as the next major resistance area.
Trump comments on Strait of Hormuz talks lifted geopolitical premium expectations
One immediate trigger for the rally came from Donald Trump’s latest comments on talks tied to reopening the Strait of Hormuz.
According to Xinhua, citing a July 4 report from Axios, regional sources and US officials said the United States, Iran, and Oman were “close to reaching” a temporary agreement to reopen the Strait of Hormuz, and Washington hoped to announce a deal on July 5.
The report said Trump stated that Iran was engaged in active discussions on reopening the waterway. Under the proposed arrangement, Iran would control ships entering the strait through the northern route, while Oman would supervise vessels leaving through the southern route. The initial plan would include a 60-day free transit period and could be extended.
Iran, for its part, said it had not held direct talks with the United States and was instead discussing the reopening through Oman, which has long served as a mediator between Washington and Tehran. The Strait of Hormuz carries about 20% of global seaborne oil flows and accounts for roughly 15% of total global oil sales, making its operating status a major factor for energy markets.
That rise in geopolitical tension pricing gave gold short-term safe-haven support and helped set off the breakout.
Central bank demand stayed strong, with South Korea returning after 13 years
Beyond geopolitics, changes in official-sector demand provided a more structural pillar for the rally.
World Gold Council data showed global central banks bought 288.9 tonnes of gold in the second quarter, up 62% from a year earlier, marking the strongest second quarter on record.
Poland was the largest buyer with 51 tonnes, taking its reserves to a record 632 tonnes and leaving it aimed at a 700-tonne target. National Bank of Poland Governor Adam Glapiński said, “We have been buying gold consistently, taking advantage of the recent price pullback.” China added 33 tonnes, extending its longer-running accumulation trend.
The market also focused on South Korea’s decision to restart gold purchases after a 13-year gap. Seoul stopped buying in 2013, when a sharp fall in gold prices left the Bank of Korea facing sizable mark-to-market losses and led to its then governor being summoned to parliament for questioning.
Even so, the longer-term result looks very different. The 90 tonnes of gold South Korea bought at an average price of $1,629 an ounce are now valued at about $11.8 billion, roughly $7 billion above the original purchase cost.
This time, the Bank of Korea’s plan is limited in size. It intends to bid only for 4 to 5 tonnes of annual gold output recovered from domestic copper and zinc smelting by-products, while keeping overall reserves at about 104.4 tonnes. The symbolic significance, though, was seen as larger than the volume itself because it signals that an economy absent from the gold market for years is returning.
Jung Hee-sub, head of reserve management at the Bank of Korea, said the purchase decision was not based on any specific price call but on a broader assessment of domestic and overseas gold prices and market conditions.
Cooling Fed tightening expectations added macro support
A shift in Federal Reserve expectations also helped the move. CME FedWatch showed the probability of the Fed leaving rates unchanged in September rising to 45%, the highest in more than a month. Lower rate-hike expectations reduce the opportunity cost of holding gold.
On the chart, the breakout was notable for another reason. Gold not only cleared the descending triangle that had capped prices since June 22, it also moved back above its 20-day and 50-day simple moving averages. The 50-day average had not been decisively reclaimed since March.
Bloomberg strategist Cameron Crise said that even after the more than 4% daily jump, gold “should” have fallen slightly based on his model of traditional drivers, suggesting that the rally contained momentum beyond the usual explanations.
As for near-term levels, the next upside target was placed near $4,400. The source said that zone lines up with a historical turning area from November to December 2025 and also sits close to the 23% Fibonacci retracement of gold’s retreat from its all-time high to the recent low near $4,020.
If momentum weakens, the first support levels are the 50-day moving average at $4,243, the round-number level of $4,200, and the descending trendline that has now shifted from resistance to support near $4,070.
Banks and industry groups diverged on year-end expectations
Deutsche Bank analysts Michael Hsueh and Bryant Xu expect gold to reach about $4,700 by year-end. JPMorgan, even after lowering its forecast, still puts the average fourth-quarter price at $4,500.
The World Gold Council took a more cautious view in its midyear outlook, saying that if the macro backdrop does not change materially, gold is likely to trade in a 5% range around $4,100.
Analysts also noted that central bank buying acts more as a floor than as the main engine of a large upside move. A sustained bull market, in that view, would still require a broad return from retail investors and funds.