Singapore, 8 April 2026 – Gold prices climbed as investors weighed last-minute diplomatic developments in the US-Iran conflict, with the reopening of the Strait of Hormuz emerging as the key variable shaping global market direction.
Spot gold surged as much as 3.1% to above US$4,850 per ounce, extending gains from the previous session, as traders responded to a temporary ceasefire agreement tied directly to restoring safe passage through the critical oil chokepoint.
Hormuz Reopening Driving Gold Volatility
At the centre of gold’s movement is the uncertainty surrounding the Strait of Hormuz.
The ceasefire agreement hinges on Iran allowing safe passage through the strait, an artery that carries roughly 20% of global oil supply.
- If Hormuz reopens fully: inflation fears ease, reducing demand for gold
- If disruption persists: safe-haven demand strengthens, pushing gold higher
This dual scenario explains why gold is rising even as broader risk assets, including equities and cryptocurrencies, also rally.
Safe Haven Still in Play, But Not Traditional
Gold’s recent behaviour reflects a shift in market dynamics.
While traditionally a safe-haven asset during geopolitical crises, gold is now reacting more dynamically to policy signals and energy market expectations, rather than simply rising during conflict.
Recent data shows gold rallying on diplomatic uncertainty, particularly the two-week pause in US strikes—while still facing pressure when markets shift into “risk-on” mode.
This suggests investors are no longer treating gold purely as a hedge against war, but as part of a broader macro trade tied to inflation and liquidity.
Inflation Expectations Remain Key
The link between Hormuz and gold is ultimately driven by inflation.
The closure of the strait earlier in the conflict triggered:
- A surge in oil prices
- Rising global inflation expectations
- Delayed expectations for central bank rate cuts
Now, the potential reopening is reversing those pressures, but not entirely removing them.
Markets remain cautious because:
- The ceasefire is temporary
- Oil supply recovery is not guaranteed
- Inflation risks could return quickly
A Market Caught Between Two Forces
Gold is now caught between two opposing forces:
Bullish factors:
- Geopolitical uncertainty remains high
- Fragile ceasefire conditions
- Potential inflation rebound if Hormuz fails to stabilise
Bearish factors:
- Risk-on rally in equities and crypto
- Falling oil prices on reopening hopes
- Reduced immediate need for safe havens
This tension explains why gold is rising, but not in a straight line.
Strategic Outlook
For investors, the message is clear:
Gold is no longer just a crisis hedge, it is now a macro-sensitive asset driven by energy markets and policy direction.
The next move in gold will depend almost entirely on one factor:
Whether the Strait of Hormuz remains open.
- Sustained reopening → gold may stabilise or pull back
- Renewed disruption → gold could surge sharply again
