Gold Rallies on Strong Demand as Market Regains Composure

Gold is on track to record its best weekly gain since January as investors continue to buy dips and defend key technical levels. The metal climbed as much as 1.2% on Friday to approach $4,290 an ounce, reversing a moderate decline from the previous session.

The gold price has now risen nearly 6% for the week, with buyers stepping in on subsequent weakness. This resilience suggests that the rally is being driven by more than just short-term geopolitical headlines.

The $4,000 level has become increasingly important as a psychological and technical reference point. Gold has managed to hold above this threshold, which has helped stabilize the market after several months of intense volatility.

Despite renewed tensions across the Middle East, including strikes against hostile targets around the Strait of Hormuz and threats to restrict passage for US and Israeli vessels, gold's latest advance has occurred without a significant increase in safe-haven demand. This muted reaction suggests that geopolitical risk is no longer the main driver of the market.

Chinese institutional demand is providing another source of support, with gold-backed exchange-traded funds recording additional inflows this week. The longest run of additions since March suggests that investors increasingly see current prices as attractive following the substantial decline from earlier highs.