Gold Soars Past $4,160 on Hormuz Diplomacy and Central Bank Buying Spree

The precious metals market has been influenced by two distinct factors in recent days: a geopolitical thaw that reduced immediate risk premiums and a structural wave of official-sector demand.

A concrete proposal from Qatar to resume shipping traffic through the Strait of Hormuz, backed by the United States, Iran, and Oman, has led to a sharp rally in gold prices. The US Treasury Secretary expressed confidence in near-term stabilization of the region, which rippled through energy markets, causing WTI crude to drop roughly seven percent.

This decline in energy costs fed into inflation expectations, shifting the interest-rate calculus. Futures markets now price just one Federal Reserve rate hike between now and year-end, down from two anticipated moves a week earlier. Central banks continue to accumulate gold reserves, with a record 289 tonnes purchased in the second quarter.

The Bank of Korea plans to resume physical gold purchases for the first time since 2013, starting with foreign gold ETFs and building a framework to acquire domestically mined gold. Analysts view this as a potential signal for a sustained trend reversal, although the path ahead remains uncertain.