Gold jumps over 1% as softer oil, weaker dollar lift bullion; central bank demand underpins outlook

Vijay Valecha, Mon, June 4, 2026 Khaleej times

Gold prices advanced sharply on Thursday, with the metal benefiting from a weaker dollar and falling bond yields as easing oil prices fuelled optimism around a potential de-escalation in the Iran conflict. Investors turned to bullion as shifting geopolitical signals and softer energy markets rippled through currency and fixed-income markets.

Spot gold rose 1.7 per cent to $4,505.35 per ounce by mid-morning US trading, while US gold futures for August delivery climbed 1.5 per cent to $4,532.80, according to Reuters data. The move highlights how closely gold continues to track macroeconomic expectations, particularly around interest rates, currency movements and geopolitical risk.

Despite the latest uptick, gold’s broader trajectory has been shaped by deeper structural forces, with central bank demand emerging as a key long-term pillar of support. Analysts say this institutional buying trend is increasingly outweighing traditional drivers such as short-term inflation fears or speculative flows.

Market participants say this shift is especially pronounced among emerging-market central banks such as China and India, which have historically held lower proportions of gold and are now diversifying more aggressively. Rather than replacing the U.S. dollar, the trend reflects a broader move toward spreading reserve risk in an increasingly uncertain world.

Short-term trading signals, however, remain cautious. Vijay Valecha, Chief Investment Officer at Century Financial, said gold is still navigating a fragile near-term environment.

“Technically, gold continues to trade within a weak near-term, with immediate support seen near $4,430, followed by stronger downside support around $4,369,” Valecha said, referring to recent price levels. On the upside, he identified resistance near $4,570, with a sustained recovery potentially opening the move toward $4,750.

Silver, meanwhile, has remained relatively range-bound, with support around $71 and resistance near $78, according to Valecha. A break above that level could push prices toward $80, he added.

Looking ahead, analysts say gold’s outlook will continue to be shaped by a combination of macroeconomic shifts and structural demand. While interest rates, inflation expectations and currency movements will drive short-term fluctuations, central bank buying is increasingly anchoring the market’s long-term direction.

Khaleej Times