Gold and Silver Rally on Hormuz Hopes, But Traders Demand Concrete Proof

Gold and Silver have rebounded notably as oil prices extend their sharp decline, with markets cautiously increasing bets that a US-Iran ceasefire expansion may be nearing. US Secretary of State Marco Rubio, speaking in New Delhi, stated there was a “viable framework on the table” involving the reopening of the Strait of Hormuz and the initiation of “a very real, significant, time-limited negotiation on the nuclear matter.” Donald Trump also described the arrangement over the weekend as a “Memorandum of Understanding pertaining to PEACE” that had been “largely negotiated.”

Reports indicate Iran has agreed “in principle” to reopen the Strait of Hormuz in exchange for the U.S. lifting its naval blockade and Tehran disposing of its highly enriched uranium. However, the term “in principle” carries significant weight, as no confirmation exists on the final agreement’s details, control of transit through Hormuz, or the realistic feasibility of the enriched uranium disposal terms.

This mix of cautious optimism and lingering skepticism explains why precious metals are rebounding without fully breaking out. Markets are not yet pricing in a genuine normalization of global energy flows. While oil falls, traders seek verifiable proof that the Strait of Hormuz will reopen before aggressively unwinding geopolitical risk premiums across asset classes.

Technically, Gold’s decline from 4889.24 is interpreted as a corrective three-wave move. A firm break above 4589.16 resistance would suggest the pullback has already completed at 4453.47, targeting 4773.50 next to confirm a bullish continuation.

Should another decline occur, strong support is anticipated at the 61.8% retracement of the 4098.45 to 4889.24 rally, at 4400.53, to contain further downside.

For Silver, a break above 78.87 resistance would suggest the decline from 89.37 has completed at 73.08, ahead of key support around the 70.83 cluster (the 61.8% retracement of the 60.97 to 89.37 move at 71.81). A rise from 73.08 would then be seen as the second leg of the sideways pattern from 89.37, initially targeting the 78.87 hurdle.

A rejection at 78.87 could prompt another leg lower, but the 70.83/71.81 support zone is expected to hold and trigger a rebound.

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