Gold Surges Past $4,300 Amid Central Bank Buying and Geopolitical Tensions

Gold prices have surged to their strongest weekly advance since January, exceeding $4,300 an ounce. Silver has also seen significant gains, rising more than 10% in the same period.

The main driver behind these price increases is a combination of geopolitical tensions, oil prices, interest rates, and central bank gold demand. Traders initially hoped for a resolution to the Iran-US-Oman agreement that would restore normal shipping through the Strait of Hormuz, which would have led to lower oil prices and eased inflation fears.

However, as hopes for the agreement weakened, oil prices surged, creating a tug-of-war between falling rate expectations and inflation threats. Central banks continue to buy gold, with 51 tonnes added in June, led by Poland and China, according to Heraeus data. The World Gold Council estimates total central bank net gold demand at 345 tonnes for the first half of 2026.

India's silver imports have collapsed due to government restrictions on silver imports and increased duties. Despite this, domestic silver premiums remain high, reaching $6.50 per ounce in early July. The market is now navigating a complex interplay between monetary forces, industrial demand, volatility, and new barriers in the world's largest physical markets.