Gold’s Whiplash Week: US Strikes, Hormuz Talks and a Fed That Won’t Budge
01.06.2026 - 08:44:16 | boerse-global.deGold closed Friday at $4,569.90 an ounce, a level that reflects a market tugged in opposite directions. A fresh wave of military escalation between Washington and Tehran over the weekend drove safe-haven buying, but diplomatic efforts to reopen the Strait of Hormuz are simultaneously sapping the rally’s momentum. US forces struck Iranian radar and drone facilities, and the Islamic Revolutionary Guard Corps responded with attacks on a US air base, reinforcing gold’s traditional role as a crisis hedge. Yet just days earlier, the two sides exchanged draft agreements aimed at extending the ceasefire and unblocking the strategic waterway — a development that traders are now pricing into volatility expectations.
The yellow metal is coming off a turbulent May that saw it swing from a high near $4,774 in the first half to a low of $4,366 before stabilising around $4,538 on 29 May. On a monthly basis, gold is still nursing a loss of roughly 0.8%, though year-on-year it has gained 34%. Analysts currently see the short-term trading range between $4,300 and $4,600, with the next major catalyst likely to come from the Strait of Hormuz itself. Since 28 February 2026, shipping traffic through the chokepoint has collapsed to just 5% of pre-conflict levels, disrupting roughly 20% of the world’s crude oil and liquefied natural gas flows. The knock-on effect on energy prices has already begun feeding into inflation expectations.
On the macro front, April’s core PCE inflation reading of 3.8% came in above forecasts, adding to the case for the Federal Reserve to keep rates higher for longer. The central bank left its target range unchanged at 3.50–3.75% at its 29 April meeting — the third straight hold since the last cut on 10 December 2025. The FedWatch tool now assigns a 47.4% probability to a rate hike by year-end, while a cut is priced at just 0.6%, a dramatic shift in market expectations. All eyes are on the 16–17 June FOMC meeting, which will deliver updated economic projections and an updated dot plot.
Should investors sell immediately? Or is it worth buying Gold?
Geopolitical risks are not confined to the Middle East. On 29 May, a Russian drone struck a residential building in Galati, Romania, prompting the expulsion of a Russian consul and escalating tensions along NATO’s eastern flank. Meanwhile, fresh US export controls on high-performance chips to China have revived trade friction in the Asia-Pacific region, despite earlier conciliatory signals after the Trump-Xi summit. This accumulation of instability continues to underpin structural demand for bullion, even as the market behaves increasingly like a risk asset — the negative correlation between gold and crude oil has become pronounced in recent weeks.
Physical appetite tells a different story. In India, high domestic prices and import duties are stifling purchases, while Chinese premiums have narrowed amid cautious sentiment. Asia’s two biggest consumers remain on the sidelines, a factor that has capped upside potential during the recent rally. Still, central bank buying remains an enduring support, and strategists see that trend persisting given the uncertain macro backdrop.
Doug Moglia of Rockefeller Global Investment Management frames the current cycle in a broader context: gold has been in a long-term bull market since 2022, now entering its fourth year. Forecasts point to a price of $5,500 by 2027, assuming geopolitical instability and inflationary pressure persist. From the 52-week high of $5,450, the metal is still roughly 16% below that peak, though euro-denominated gold has already gained 11% since the start of 2025, signalling that demand is not limited to dollar-based investors.
For now, gold is caught between the war premium from fresh US-Iran hostilities and the disinflationary promise of a Hormuz reopening, all while the Fed refuses to blink. The US jobs report due this week will provide the next near-term clue on whether the central bank can hold its line — or whether the path to $5,500 will require new catalysts entirely.
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