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Gold prices surged past $4,850 per troy ounce on Friday, marking a 1.5% increase, driven by the de-escalation of US-Iran tensions following Iran's reopening of the Strait of Hormuz. This strategic waterway, critical for global oil shipments, had been a focal point of geopolitical risk, and its reopening eased inflationary pressures and reduced safe-haven demand for gold. The US Dollar weakened against major currencies as investors shifted to alternative assets amid improved risk appetite.
The move highlights gold's role as a hedge against geopolitical uncertainty and currency volatility. Traders are monitoring whether the Dollar's decline will persist, which could further support gold prices. Additionally, the easing of oil supply concerns may impact inflation-linked assets like commodities and emerging market equities.
For Gulf investors, the Strait of Hormuz's reopening reduces immediate risks to regional energy exports. However, lingering geopolitical tensions in the Middle East remain a key variable. Traders should watch for follow-up developments in US-Iran relations and central bank policies, which could influence both gold and the Dollar's trajectory.
