Gold and Silver Rally on Hormuz Reopening

Gold and silver experienced a surge to the upside after President Trump proclaimed that the Strait of Hormuz will remain open for the remainder of the ceasefire period a 10-day window that already has extension proposals on the table. The announcement had a dramatic effect across asset classes: crude oil plummeted by more than 10%, and U.S. equities surged to new all-time highs as inflation risk premiums compressed sharply.

Gold futures jumped on the news, touching intraday highs just above the 50-day simple moving average at $4,917 per ounce before selling off systematically from that point. Despite giving back a significant portion of those gains ahead of the close, gold futures still ended the session up $38.50, or 0.80%, at $4,849. According to Trading Economics, gold has now risen more than 41% over the past 12 months a performance that reflects the structural realignment of the metal's role in global portfolios.

Silver futures also experienced a sizable move, despite surrendering a portion of gains into the close. Silver added $2.47, or 3.15%, to settle at $80.90 per ounce. At the session high, silver was up more than 5% on the day. For the week, Comex silver futures gained 6.45% marking the fourth consecutive week of gains and a remarkable 32% advance from prices recorded in late March. Silver futures nonetheless remain 33.55% below the all-time high set on January 29th.

The geopolitical backdrop, while constructive in the near term, remains deeply unsettled. Iranian officials have yet to independently verify all of Trump's stated terms, and the U.S. naval blockade is reported to remain in full force pending a comprehensive agreement. The IMF's energy director has cautioned that restoring meaningful oil and gas output could take up to two years even in a best-case scenario a structural uncertainty that continues to underpin precious metals demand.

The broader bull thesis for gold heading into the second half of 2026 rests on several compounding structural drivers. Central banks have now been net buyers of gold for 17 consecutive years, with J.P. Morgan projecting roughly 755 tonnes of official sector purchases in 2026 alone well above pre-2022 historical norms. ETF inflows, which recorded their largest quarterly increase in years during Q3 2025, continue to add institutional depth to the rally. The Federal Reserve's easing bias, combined with a gradually weakening U.S. dollar, further reduces the opportunity cost of holding the non-yielding metal.

Major institutions have revised their year-end targets sharply higher. Goldman Sachs targets $5,400 per ounce by late 2026, while Bank of America, Wells Fargo Investment Institute, Deutsche Bank, and Societe Generale have each placed their forecasts in the $6,000 range, citing fiscal deficit concerns, de-dollarization flows, and the ongoing reallocation away from U.S. Treasuries by emerging-market central banks. Blue Line Futures' chief strategist Phil Streible projects gold reaching $6,000 on the basis of continued ETF inflows and Fed easing alone.

Silver's fundamental case is reinforced by persistent structural supply deficits. The Silver Institute and Metals Focus have warned of a sixth consecutive year in deficit, with 762 million troy ounces drawn from global stocks since 2021, raising acute concerns about a potential liquidity squeeze. Industrial demand particularly from the electronics and solar segments tied to the global energy transition continues to provide a firm price floor even as speculative positioning oscillates around geopolitical developments. Gold ended Q1 2026 with a 7% gain in USD terms, and despite a sharp 12% pullback in March driven by rate-cut expectation revisions, the late-quarter recovery extended into April has restored bullish momentum.

Friday's intraday reversal from $4,917 will keep technicians watchful; the 50-day moving average has reasserted itself as a meaningful level of resistance. Still, the fourth consecutive weekly close higher for both metals, against a backdrop of easing oil-driven inflation risk and sustained institutional demand, leaves the structural case for gold and the increasingly compelling cyclical case for silver firmly intact.

Wishing you as always good trading,