Gold prices held steady after President Trump said the Strait of Hormuz will reopen this week, easing supply fears but leaving safe-haven demand intact amid broader macro uncertainties.
The reopening of the Strait of Hormuz directly reduces the risk of crude oil supply disruptions, which had previously buoyed prices. The removal of this geopolitical overhang may lead to a decline in oil futures.
The exact magnitude is uncertain, but the removal of supply disruption fears could erase the recent geopolitical risk premium, potentially pushing WTI back to pre-crisis levels around $80-85, depending on demand conditions.
OPEC+ may reaffirm its commitment to production cuts if prices decline significantly, but an imminent adjustment is unlikely unless the market overshoots to the downside.
Partial pricing has likely occurred, but confirmation of the reopening could trigger a further sell-off as traders unwind hedges and speculative long positions built during the crisis.
Gold held its recent gains after Trump's announcement that the Strait of Hormuz would reopen this week, suggesting that easing geopolitical tensions were not sufficient to reverse the metal's rally driven by broader macro concerns such as trade policy and dovish central bank expectations.
Gold held gains because the initial rally was driven by persistent trade uncertainties and expectations of central bank rate cuts, which continued to support the metal even as the reopening of the Strait of Hormuz reduced geopolitical risk premiums.
The near-term direction depends on upcoming economic data and Fed rhetoric. If the reopening leads to a sustained risk-on environment, gold may consolidate or correct, but dovish monetary policies could keep it supported.
Gold faces resistance around the recent highs; a decisive break above could target the next psychological level, while support sits near the 50-day moving average.
Gold held its gains on Monday following President Trump's announcement that the Strait of Hormuz would reopen this week. The prospect of easing Middle East tensions pressured oil prices but failed to reverse gold's rally, as investors remained focused on trade policy uncertainties and expectations of central bank rate cuts. The metal's resilience indicates that safe-haven demand is being underpinned by broader macroeconomic concerns.
Despite the easing of immediate supply risks in the Strait of Hormuz, gold held gains because the metal had been bid up earlier on renewed geopolitical concerns and trade uncertainties. The reopening news was not sufficient to unwind safe-haven demand.
The reopening is likely to stabilize oil prices by restoring confidence in crude supply routes, potentially lowering the geopolitical risk premium embedded in oil futures.
Trump's proactive stance on the Strait of Hormuz could reduce near-term volatility in energy markets and provide a tailwind for risk assets, though ongoing trade tensions may limit the positive effect.