Gold prices climbed above the key $4,300-an-ounce mark on Friday, while silver surged nearly 5% to around $65 an ounce, extending its recent rally as investors increased exposure to precious metals amid expectations of lower US interest rates, improving technical momentum and lingering geopolitical uncertainty.
The rally comes even as optimism over a potential easing of tensions in the Middle East has tempered inflation concerns. Markets are increasingly betting that the US Federal Reserve may adopt a less aggressive monetary stance, improving the appeal of non-yielding assets such as gold and silver.
Ghassan Albohtori, financial market analyst at STARTRADER, said gold has entered a fresh bullish phase after ending its recent correction.
“Gold has staged a strong recovery after forming a medium-term bottom near $3,943, ending the multi-month corrective phase. The recent breakout above the 20-day moving average and the subsequent move above both the 5-day and 10-day moving averages indicate that bullish momentum is returning,” he said.
Albohtori added that the moving averages are now turning higher, suggesting the broader uptrend is rebuilding. However, he cautioned that the metal is approaching an important resistance zone around $4,300, which had earlier acted as a major support level during the correction.
“Some profit-taking or short-term consolidation would therefore be healthy before another leg higher. The medium-term outlook remains constructive as long as gold holds above the 20-day moving average around $4,080-$4,100,” he added.
Renisha Chainani, chief research officer (CRO) at Augmont, said a combination of geopolitical developments and changing expectations around US monetary policy is supporting bullion prices.
She noted that optimism surrounding a possible Iran-US peace deal has reduced inflation expectations, allowing gold to break decisively above $4,200 after trading in a range for several weeks. At the same time, markets are now pricing in a 55% probability of a US rate hike in September, down from 63% a week ago, signalling softer policy expectations that are favourable for precious metals.
Chainani also pointed to comments by US President Donald Trump indicating that the conflict with Iran could end soon, while highlighting reports of shortages in certain military supplies. These developments, she said, continue to keep geopolitical risks on investors’ radar.
From a macro perspective, she believes the technical structure remains supportive despite near-term volatility around the US non-farm payrolls data.
“Whatever today’s NFP report ends up showing, $4,000 has held firm as a strong support level, and buyers appear to be waiting for dips to position for a much-needed move higher toward $4,600. The NFP data may create some short-term noise, but the underlying price action already tells the story, and gold appears ready to rally,” she said.
On the technical front, Chainani expects gold’s breakout above $4,200 to potentially drive prices towards $4,500. Silver also appears well positioned, with a sustained move above $63 likely to pave the way for a rally towards $70-$71 an ounce.