Gold and Silver Prices Soar to Two-Week Highs Amid Weaker Dollar and Geopolitical Tensions

Gold prices climbed to their highest level in more than two weeks on Wednesday, buoyed by a weaker US dollar and technical buying. The precious metal closed at US$4,129.35 per troy ounce, marking a 1.3% increase and extending a two-day winning streak to 3.06%. However, in early Thursday trading, gold eased 0.25% to US$4,119.01 per troy ounce.

Lukman Otunuga, Senior Research Analyst at FXTM, noted that the dollar’s decline and bargain hunting were the primary drivers behind the rally. He cautioned that a more than 3% surge in oil prices could limit gold’s upside, as higher energy costs reinforce expectations that interest rates will remain elevated for longer.

Geopolitical tensions also supported the safe-haven asset. US Secretary of State Marco Rubio stated that Washington remains open to negotiations with Iran but believes Tehran is not serious about talks. Meanwhile, escalating threats from the Houthi group forced four Saudi oil tankers bound for Asia to turn back in the Red Sea. The resulting spike in oil prices has stoked inflation fears, bolstering the case for sustained high interest rates, a typically unfavourable environment for non-yielding bullion.

A Reuters poll suggests the Federal Reserve will hold rates steady for the remainder of 2026, though markets are pricing in a 76% chance of a rate hike in September. Investors are now awaiting the outcome of next week’s FOMC meeting for further policy direction.

Silver prices also rallied, closing 1.6% higher at US$59.75 per troy ounce on Wednesday, marking a four-day winning streak with a cumulative gain of 7.66%. In early Thursday trading, silver dipped 0.43% to US$59.45 per troy ounce.