Strait of Hormuz Announces Reopening Gold Rises to One-Month High. Will Gold Price Return to $5,000? Not That Optimistic.

TradingKey - On April 17, Iranian Foreign Minister Abbas Araqchi announced on social platform X that the Strait of Hormuz will be open to all commercial vessels for the remainder of the Israel-Lebanon ceasefire. Trump subsequently confirmed the news, posting that the Iranian strait is now fully open for transit.

Following the impact of this news, oil prices plummeted on the day, WTI crude oil futures closed down 11.45%, Gold edged higher, reaching as high as $4,889.70 and jumping to a near one-month high.

Amid expectations of de-escalating Middle East tensions, is gold poised to return above $5,000 in the short term?

Will the Strait Remain Open? US and Iran Offer Conflicting Accounts

The Islamic Revolutionary Guard Corps (IRGC) Navy Command issued new vessel transit regulations on the night of the 17th, maintaining a ban on military vessels and requiring civilian ships to follow designated Iranian routes and coordinate in advance with the IRGC Navy.

Subsequently, an Iranian Ministry of Defense spokesperson further tightened the regulations, stating that the Strait of Hormuz is only conditionally open under ceasefire conditions and will revert to its previous status if Lebanon faces pressure.

Iranian Parliament Speaker and head of the negotiating delegation Mohammad Bagher Ghalibaf posted directly on X to refute Trump's claims; Trump had asserted on the 17th that the situation in the Strait of Hormuz had concluded and that Iran had agreed to most conditions, including the full reopening of the strait, a commitment to abandon highly enriched uranium stockpiles, and an end to support for regional proxy militias.

Ghalibaf stated, "The U.S. President issued seven statements in an hour, all of which are false," while warning that the strait will not remain open if the U.S. maritime blockade continues. Trump responded by ordering the continuation of the maritime blockade on Iranian ports this week until a deal is reached to end the war.

This has placed both sides in direct confrontation: the U.S. views the maritime blockade as a tool to force Iran back to the negotiating table, while Iran treats the status of the strait as a countermeasure against the U.S. naval blockade.

Oil tankers reverse course in the Strait of Hormuz.

In fact, transit through the Strait of Hormuz is far more complex than the market anticipates.

According to Bloomberg, at least eight oil tankers surged toward the Strait of Hormuz within hours of the Iranian Foreign Minister's announcement of its reopening. Five of these vessels were previously anchored north of Dubai, while another three waiting approximately 70 miles away also began moving toward the strait. Bloomberg noted that if these ships continue their journey, it would represent one of the clearest signals since the outbreak of war on February 28 that the Strait of Hormuz is opening to non-Iranian related vessels. However, the situation remains far from simple.

According to the Financial Times, ship-tracking satellites show that among the vessels that set sail after Iran announced the reopening, at least 12 turned back midway. Several other ships, including one from CMA CGM, remain stationary at the entrance to the strait, indicating that the passage is currently not unimpeded.

Gold’s Upside Momentum Limited Amid US-Iran Uncertainty

Regarding the reopening of the Strait of Hormuz, Peter Grant, Vice President and Senior Metals Strategist at Zaner Metals, stated that this is a pivotal event. As oil prices come under pressure, it is expected to ease inflation concerns and reignite market expectations for rate cuts, both of which are materially positive for gold. Based on these projections, he believes gold prices are poised to return above $5,000 in the short term.

Although Wall Street generally believes gold still possesses upside momentum, some analysts point out that the situation may not be as optimistic as the market imagines. Darin Newsom, Senior Market Analyst at Barchart.com, is bearish on gold prices, as daily stochastic indicators show that June gold is already in overbought territory. He noted that it is necessary to monitor the impact of news coming out this weekend.

Daniel Pavilonis, Senior Commodities Broker at RJO Futures, believes that although gold rose on Friday, it currently appears more like a technical rebound. The precious metals market has not seen a clear V-shaped reversal, and the strength of the pullback seems less pronounced than in the stock market. He stated that while gold may attract more interest in the coming weeks, it is not currently the top priority asset for investors, as the market's primary focus remains on equities.