Gold nears $4,300, silver jumps 3.5% as dollar weakens: Kotak Securities
Precious metals gain as softer crude and a weaker dollar offset geopolitical risks, while markets await US jobs data for clues on the Fed’s next move.
The outcome of Iran's Hormuz proposal remains the single biggest near-term catalyst for crude markets. (AI Image)
Spot gold edged closer to $4,300 an ounce on Friday, approaching Thursday’s seven-week high of $4,303, while silver climbed 3.5% to around $64. Both metals are on track for their strongest weekly performance since January, supported by softer crude oil prices and a weaker US dollar, as hopes of a shipping arrangement through the Strait of Hormuz eased concerns over supply disruptions.
This offset Thursday’s report that Iran’s parliament was reviewing restrictions on “hostile” vessels transiting the waterway. The headline had briefly revived inflation fears and triggered profit-taking, pushing gold to close below $4,240 and silver at $61.5.
On the macro front, US Initial jobless claims fell to 199,000 and Challenger job cuts dropped to a two-year low, underscoring the resilience of the US labour market. However, renewed institutional demand remains supportive, with global gold ETFs recording inflows of 23.5 tonnes in July, reversing two consecutive months of outflows.
“Market attention now turns to Friday’s US nonfarm payrolls report, the week’s key catalyst for Federal Reserve rate expectations. Traders currently assign a 55% probability to a September rate move, down from 63% a week earlier, according to CME FedWatch. The payrolls report remains the key swing factor as a softer payrolls outcome could reinforce expectations of a more patient Fed and provide further support to precious metals, while a strong reading may prompt profit-taking,” said Kaynat Chainwala, AVP Commodity Research, Kotak Securities.
Brent extended its advance on Friday, climbing to $84.4 per barrel while WTI firmed near $78, building on Thursday’s sharp rebound that snapped three straight sessions of losses. Brent had jumped 4% to $82.5 and WTI gained 2.7% to $77.3 on Thursday after Iran’s parliament reviewed a bill to restrict US- and Israel-linked vessels from the Strait of Hormuz, explicitly tying the waterway’s full reopening to the lifting of the US maritime blockade.
The supply-risk premium was reinforced by reports of fresh strikes near Qeshm Island and renewed Houthi claims of attacks in the Red Sea, keeping the geopolitical risk map wide even as diplomatic contacts continue. Saudi Aramco added to the cautious undertone, setting its September Arab Light price for Asia at its lowest level in six years while asking customers to prepare alternative loading routes, a sign that producers are actively managing disruption risk rather than betting on a quick resolution.
Markets are now weighing whether Iran’s proposal reflects a durable policy shift or a negotiating lever ahead of further talks with Oman. Trump’s comment that the conflict would likely end “pretty soon,” alongside reported strains on the armed forces’ weapons supplies, offers a tentative de-escalatory counterweight.
“For now, oil remains overwhelmingly headline-driven. Any indication that tensions around the Strait of Hormuz are easing could quickly unwind the recent risk premium, while further escalation or restrictions on shipping would likely push prices higher. The outcome of Iran’s Hormuz proposal remains the single biggest near-term catalyst for crude markets,” said Chainwala.
