Gold and Silver Prices Rise Sharply Amid Strait of Hormuz Reopening
Detailed Analysis
Precious Metals Surge as Iran Reopens Strait of Hormuz
Precious metals traded with solid gains on Friday, April 17, as sentiment towards safe-haven assets improved following Iran's announcement that it would reopen the Strait of Hormuz. This move pushed oil prices lower and eased some inflation concerns, boosting the appeal of gold and silver among investors.
The Comex gold futures rallied by $109 per troy ounce to reach a one-month high of $4,917, while silver futures surged $4.53 to $83.24, the highest level in a month. Both metals are heading for their fourth consecutive weekly gains, with gold surging 7.5% and silver 19.5% over the past four weeks.
| Metal | Week 1 | Week 2 | Week 3 | Week 4 | | --- | --- | --- | --- | --- | | Gold | 2.5% | 3.5% | 1.5% | 7.5% | | Silver | 10.2% | 5.8% | 2.8% | 19.5% |
The fall in the US dollar is also supporting the rally, with the US dollar falling to 93.6, the lowest level in six weeks. This makes greenback-denominated commodities, including bullion, more affordable for holders of other currencies.
Iran's Foreign Minister, Abbas Araghchi, announced that the Strait of Hormuz is "declared completely open" in line with the ceasefire in Lebanon, and will remain open for the duration of the truce. US President Donald Trump affirmed that the strait is "ready for full passage" in a social media post minutes later.
The reopening of the Strait of Hormuz was a major concern for Trump, as elevated fuel prices had hurt him politically and frustrated American allies in Asia and Europe. With reduced concerns over inflation, a sustained decline in oil prices could encourage the Federal Reserve to resume rate cuts to support economic growth.
In the domestic market, the near-month gold futures contract on the Multi Commodity Exchange (MCX) gained ₹2,348 per 10 grams, reaching a day's high of ₹1,55,500 per 10 grams. Silver prices rose by ₹13,122 per kilogram to hit a day's high of ₹2,61,750, the highest level in a month.
Investor Takeaway
Investors may consider diversifying their portfolios with safe-haven assets like gold and silver.
