Gold prices increased amid growing buying interest spurred by substantial acquisitions from China’s central bank, even as escalating tensions in the Middle East posed risks to a fragile ceasefire.
Gold was trading close to $4,720 per ounce after a slight decline in the previous session. The US military targeted sites in Iran following the country’s attack on three navy destroyers navigating the Strait of Hormuz.
These clashes have intensified tensions as the US seeks to withdraw from a conflict that has persisted for three months, while awaiting Iran’s response to proposals to reopen the strategic Strait of Hormuz, a critical route for energy transport.
Recent data revealed that the People’s Bank of China (PBOC), a major buyer of gold, purchased 8 tons of the metal in April, marking the highest monthly acquisition since 2024. “The PBOC’s ongoing buying trend can be encouraging for Asian buyers,” remarked Ahmad Assiri, an analyst at Pepperstone Group Ltd. He noted that current market activity appears to be positioning for a potential rally once hostilities in the Middle East subside.
Gold has seen a decline of approximately 11% since the onset of the conflict, as the nearing closure of the Strait of Hormuz and subsequent energy price shocks raised concerns over inflation, suggesting that interest rates may remain elevated for an extended period. Rising rates and a strengthening US dollar negatively impact gold, which does not yield interest and is priced in dollars.
Traders are now focused on the forthcoming US non-farm payrolls report, expected later Friday, for potential insights into the direction of interest rates. Some officials from the Federal Reserve have minimized the likelihood of a return to monetary easing, citing uncertainty in the economic outlook due to the ongoing war.
As of 11:28 a.m. in Singapore, spot gold rose by 0.8% to $4,721.05 per ounce, marking a 2.3% weekly increase. Silver increased by 1.8% to $79.84, while both platinum and palladium prices also advanced. Meanwhile, the Bloomberg Dollar Spot Index, which tracks the value of the US dollar, rose by 0.1% but was down 0.2% for the week.
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Published on May 8, 2026.
