Gold Prices Surge 4.4% for Strongest Daily Gain Since February as Bond Yields Fall and Progress Seen in Strait of Hormuz Reopening

Spot gold prices surged 4.4% on Wednesday (5th), recording the largest single-day gain since February, as U.S. Treasury yields declined and progress was made in efforts to reopen the Strait of Hormuz.

Spot gold rose 4.4% to $4,253.36 per ounce, briefly touching $4,264.93 during the session—the highest since June 18—and breaking above the 50-day moving average, which currently stands at $4,160.

December gold futures settled 3.7% higher at $4,305.20 per ounce.

"With market expectations for rate hikes cooling since last week, early movers are returning to the precious metals market," said Tai Wong, independent metals trader. "Additionally, the dollar's sharp weakness is providing support, and the temporary de-escalation of tensions with Iran is also favorable for gold."

Market hopes that a five-month-long conflict may be nearing an end grew after U.S. President Trump stated that the government is holding 'very good' 24-hour negotiations with Iran. The dollar traded near six-week lows against major currencies, while the U.S. 10-year Treasury yield remained near its one-week low.

A weaker dollar makes gold more attractive to overseas buyers, and declining bond yields reduce the opportunity cost of holding non-yielding gold.

However, gold prices remain down about 24% from their all-time high of $5,594.82 per ounce reached in January and have fallen 19% since the outbreak of the Israel-Iran war in February, when concerns over energy-driven inflation strengthened bets on rate hikes.

According to the World Gold Council (WGC), global central bank gold purchases in the first half of 2026 fell to the lowest since 2022. Gold ETFs saw a net outflow of 45 tons in the second quarter, during which gold prices plunged 14%, marking the largest quarterly drop since 2013.

JPMorgan noted in a report that with central bank buying turning conservative, retail funds shifting to other markets, and weak physical gold demand in Asia, rate-sensitive gold ETF flows have become the marginal force driving gold prices.

"For the metals market to begin a more forceful rally, the market must start pricing in rate cuts, but at this point, it won’t happen until at least 2027," said Wong.

Other precious metals trading

Spot silver rose 4.4% to $62.11 per ounce, briefly reaching its highest since July 6.

Spot platinum gained 0.2% to $1,740.04 per ounce, briefly hitting its highest since June 17.

Spot palladium climbed 1.5% to $1,373.24 per ounce, briefly reaching its highest since June 2.

Suki Cooper, analyst at Standard Chartered, said, "Since the conflict began, platinum and palladium prices have already reflected many negative factors, including concerns over slowing auto production, rising EV market share, and growth potential in recycling."

She expects platinum to face supply shortages this year, while palladium will see oversupply.