Precious metals surged $1.3 trillion in combined value over 24 hours Wednesday as tensions between the US and Iran cooled and economic data shifted investor expectations. Gold climbed above $4,257 per ounce, its best level in seven weeks, while silver rode the same wave higher.
The rally hinged on three things hitting at once. Treasury yields fell on softer labor data, the US dollar weakened, and reports surfaced that Washington, Tehran, and Oman were discussing a temporary agreement to reopen the Strait of Hormuz. That last piece mattered most, traders said, because it meant less pressure on shipping costs and energy prices, which had been fueling inflation worries.
Gold's market cap jumped roughly $1.135 trillion in a day. Silver added about $212 billion. The moves came as the ADP payroll report came in below expectations and job openings data softened, making the market think the Federal Reserve might hold rates steady longer than previously priced in.
Veteran trader Peter Brandt spotted something technical on the charts that suggested more upside ahead. Gold futures broke above a long-term descending trendline that had capped rallies since March. The breakout completed a Cup-with-Handle pattern that formed between $4,000 and $4,100, shifting the technical picture bullish. Brandt sees $4,517 as the next target, with $4,830 possible if momentum holds.
The invalidation of the previous bearish structure means the old resistance zone around $4,150 to $4,200 could now act as support on any pullback. Momentum indicators are also strengthening, with the Average Directional Index rising to 26.5, signaling trend strength is building.
Investors are now watching upcoming US Consumer Price Index and Producer Price Index reports, which could reshape expectations for interest rate policy over the coming months.
This article is informational and does not constitute financial advice. Past performance and technical patterns do not guarantee future results.
