Gold breaks through $4,700, analysts warn risks remain.
2026-05-06 22:27:00
On Wednesday (May 6), during the US trading session, spot gold was trading at $4,713 per ounce, up more than 3% on the day; spot silver held steady above $77 per ounce, up 6.5% on the day.
Analysts say precious metals rose as the dollar weakened – it fell to a 10-week low after US President Trump announced a suspension of US escort operations in the Strait of Hormuz following “major progress toward a comprehensive final agreement with Iranian representatives.”
As the US dollar weakened, positive news of easing tensions in the Middle East also pushed oil prices down sharply, easing inflation concerns, which had previously forced central banks to adopt more hawkish monetary policies.
In a report on Wednesday, Trade Nation senior market analyst David Morrison said that despite the many questions that remain about the peace talks, any news that reduces uncertainty is good for financial markets.
"The specific details of the agreement are still unclear, especially the clauses related to the reopening of the Strait of Hormuz. However, investors generally believe that the state of hostilities may be coming to an end ten weeks after the outbreak of war," Morrison said.
However, he also pointed out that the war has had a significant impact on the global economy and inflation, meaning that an interest rate cut this year is not a certainty.
"It's worth noting that investors expect a 20% probability of a Fed rate hike before the end of the year. If the dollar resumes its upward trend, it could limit the upside potential for gold," he added.
Simon-Peter Massabni, head of business development at XS, believes that the recent surge in gold prices is not only driven by technical factors, but also reflects a shift in global risk appetite.
"This easing of tensions (even if only temporarily) will have a dual impact: on the one hand, it will benefit risk assets, and on the other hand, the fragility of the situation will strengthen the safe-haven demand for gold, which explains the current delicate balance in gold prices," he analyzed.
However, Massabni also mentioned that the Federal Reserve's balanced monetary policy stance in the short term may limit the rise in gold prices. He explained that central banks do not have an urgent need to cut or raise interest rates this year.
He further pointed out that the gold market needs to see a further weakening of the US economy (especially a worsening of the labor market) before it can see a sustained upward trend.
"I believe the upcoming non-farm payroll report could be a key turning point for the short-term market trend. If the data falls short of expectations, it will strengthen expectations of interest rate cuts, directly benefiting gold; conversely, if the data is strong, precious metals may face downward pressure," he said.
Despite the inevitable short-term volatility, Massabni remains optimistic about the long-term outlook for gold.
(Spot gold daily chart source: FX678)
“Investing in gold now requires balancing short-term and long-term factors. Market trends are never determined by a single event, but rather by a complex interplay of politics, economics, and investor psychology. From this perspective, gold remains attractive as a core hedging asset; current volatility should be viewed within the broader context of structural changes in the global financial system, rather than simply as a reaction to short-term news,” he said.
Analysts say precious metals rose as the dollar weakened – it fell to a 10-week low after US President Trump announced a suspension of US escort operations in the Strait of Hormuz following “major progress toward a comprehensive final agreement with Iranian representatives.”
As the US dollar weakened, positive news of easing tensions in the Middle East also pushed oil prices down sharply, easing inflation concerns, which had previously forced central banks to adopt more hawkish monetary policies.
In a report on Wednesday, Trade Nation senior market analyst David Morrison said that despite the many questions that remain about the peace talks, any news that reduces uncertainty is good for financial markets.
"The specific details of the agreement are still unclear, especially the clauses related to the reopening of the Strait of Hormuz. However, investors generally believe that the state of hostilities may be coming to an end ten weeks after the outbreak of war," Morrison said.
However, he also pointed out that the war has had a significant impact on the global economy and inflation, meaning that an interest rate cut this year is not a certainty.
"It's worth noting that investors expect a 20% probability of a Fed rate hike before the end of the year. If the dollar resumes its upward trend, it could limit the upside potential for gold," he added.
Simon-Peter Massabni, head of business development at XS, believes that the recent surge in gold prices is not only driven by technical factors, but also reflects a shift in global risk appetite.
"This easing of tensions (even if only temporarily) will have a dual impact: on the one hand, it will benefit risk assets, and on the other hand, the fragility of the situation will strengthen the safe-haven demand for gold, which explains the current delicate balance in gold prices," he analyzed.
However, Massabni also mentioned that the Federal Reserve's balanced monetary policy stance in the short term may limit the rise in gold prices. He explained that central banks do not have an urgent need to cut or raise interest rates this year.
He further pointed out that the gold market needs to see a further weakening of the US economy (especially a worsening of the labor market) before it can see a sustained upward trend.
"I believe the upcoming non-farm payroll report could be a key turning point for the short-term market trend. If the data falls short of expectations, it will strengthen expectations of interest rate cuts, directly benefiting gold; conversely, if the data is strong, precious metals may face downward pressure," he said.
Despite the inevitable short-term volatility, Massabni remains optimistic about the long-term outlook for gold.
(Spot gold daily chart source: FX678)
“Investing in gold now requires balancing short-term and long-term factors. Market trends are never determined by a single event, but rather by a complex interplay of politics, economics, and investor psychology. From this perspective, gold remains attractive as a core hedging asset; current volatility should be viewed within the broader context of structural changes in the global financial system, rather than simply as a reaction to short-term news,” he said.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
