Gold, Silver Surge Over 5%, Adds Over $1.3T as US-Iran War Fears Ease

Gold and silver extended their strong recovery on Wednesday after easing geopolitical tensions and softer US economic data boosted demand for precious metals. Combined market capitalization for both metals increased by more than $1.3 trillion over the past 24 hours as investors responded to lower Treasury yields, a weaker US dollar, and expectations that US interest rates could remain lower for longer.

Gold Climbs as Dollar Weakens and Rate Expectations Shift

Gold climbed more than 5% to around $4,257 per ounce, marking its highest level in nearly seven weeks. The rally came as the US dollar lost momentum and Treasury yields remained under pressure following weaker labor market data. Lower-than-expected ADP private payroll figures and softer JOLTS job openings reduced expectations for aggressive Federal Reserve policy tightening.

Market attention also turned to reports that the United States, Iran, and Oman were discussing a temporary agreement to reopen the Strait of Hormuz. Consequently, with hopes for renewed shipping activity reducing pressure on energy prices and easing inflation concerns, additional support for bullion was created.

Gold's total market value increased by about $1.135 trillion over the past day, while silver added roughly $212 billion. Investors are also watching upcoming US Consumer Price Index and Producer Price Index reports, which could provide more direction for interest rate expectations.

Peter Brandt Sees Bullish Breakout in Gold

Veteran trader Peter Brandt said the daily Gold futures chart has broken above a long-term descending trendline that had limited previous recovery attempts since March. The breakout followed several months of selling pressure and placed the market above an important technical resistance level.

Brandt also pointed to a Cup-with-Handle formation that developed after Gold built a base between $4,000 and $4,100. The recent move above the handle completed the pattern and shifted the technical outlook higher while prices remain above the breakout level.

Source: X

The previous bearish structure for XAU/USD has also been invalidated after gold reclaimed its long-term trendline. The former resistance zone around $4,150 to $4,200 may now serve as support if prices pull back. Brandt identified $4,517 as the next resistance target, followed by $4,830 if buying momentum continues.

Momentum indicators also improved. The Average Directional Index moved to around 26.5, showing trend strength is increasing, while elevated Average True Range readings point to higher market volatility following the breakout.

Silver Rally Continues as Brandt Urges Caution

Silver also posted strong gains, rising more than 5.7% to trade near $62.96 per troy ounce. The metal benefited from the same macroeconomic conditions supporting gold, including weaker US labor market data and easing concerns over energy inflation.

Source: X

Despite the recovery, Brandt warned traders against assuming the market has already established a lasting bottom. He said many traders who missed earlier gains may be rushing into the current breakout, increasing the possibility of a sharp pullback before a stronger long-term advance develops.

Silver futures have stabilized after months of declines and continue to hold support between $56 and $60. The market has stopped making lower lows but has not yet established a consistent pattern of higher highs. The ADX remains near 27.8, suggesting the previous downtrend has weakened, while the Average True Range continues to decline as price volatility moderates during consolidation.