Gold Rises to One-Month High Amid Reports of Fully Restored Strait of Hormuz Traffic

Global Gold Prices Surge Amid Ceasefire Optimism in the Middle East

Gold prices reached a nearly month-high level after Iran declared the Strait of Hormuz "completely open" to commercial traffic, marking a significant step towards ending the conflict that had driven energy prices up and threatened economic growth.

The precious metal gained as much as 2.1% before paring some gains as the dollar and Treasury yields slumped. A weaker US currency and lower rates are favorable for gold, as it is priced in the greenback and pays no interest.

Iranian Foreign Minister Abbas Araghchi announced on X that the passage for all commercial vessels through the Strait of Hormuz is declared completely open for the remaining period of ceasefire. However, Iranian state TV cited a senior military official as saying that passage is not possible without coordination with Islamic Republic Guard Corps naval forces. US President Donald Trump stated that an American naval blockade remains in force until a deal is reached.

The Middle East conflict had effectively halted traffic through the strait, a vital waterway for energy shipments, sparking concern that surging oil and natural gas prices would lead to widespread inflation and cause central banks to delay interest-rate cuts or even hike borrowing costs. This would be a negative for non-yielding commodities like gold.

Bullion has regained some of the war losses in recent days as ceasefire optimism grew. A liquidity squeeze during the early days of fighting prompted investors to offload gold to cover losses elsewhere in their portfolios.

Key Statistics: Comparison of Gold Prices and Commodity Correlations

| Commodity | April 14 Price | Change from Previous Day | | --- | --- | --- | | Gold | $4,838.50 | 1.0% | | Silver | $26.43 | 3.3% | | Platinum | $1,044.50 | 2.1% | | Palladium | $2,544.50 | 1.5% |

Going forward, the outlook for gold appears positive. Elias Haddad, global head of markets strategy at Brown Brothers Harriman & Co., stated that "the worst of the energy shock is behind us." Rate expectations will readjust lower, weighing on real yields.

The optimism around a broader peace deal has seen traders boost rate-cut bets, pricing in about 16 basis points of easing for the December Fed meeting, up from roughly eight at Thursday's close. Money managers have increased their bullish gold bets to a four-week high as of April 14, while boosting their bullish silver to a 12-week high over the same period, according to weekly data from the Commodities Futures Trading Comission.

As of 4:28 p.m. in New York, spot gold rose 1.0% to $4,838.50 an ounce. Silver climbed 3.3%, while platinum and palladium both advanced. The Bloomberg Dollar Spot Index fell 0.06%.