Three days ago gold was struggling to hold $4,700. This Friday morning, May 8, it is trading near $4,739 and pushing toward 12-day highs. The move was not random. It was triggered by one of the most significant diplomatic developments of 2026: the White House signalling on Tuesday that a peace deal with Iran is within reach, pausing military escalation in the Strait of Hormuz and sending oil prices sharply lower.

Here is exactly what happened this week in sequence. Monday: gold cautious near $4,710, oil still elevated, tensions high. Tuesday May 5: Trump paused “Project Freedom” — the US Navy’s escort operation in the Strait — citing “great progress” in peace talks. Wednesday May 6: Axios reported the US and Iran are close to a one-page Memorandum of Understanding — Iran halts nuclear enrichment, the US lifts sanctions and unfreezes billions in Iranian assets, both sides reopen Hormuz. Markets exploded. The Dow crossed 50,000 for the first time. The S&P 500 and Nasdaq hit record highs. Oil fell below $100 per barrel. Gold surged more than 3% in a single session. Thursday May 7: some caution returned as both sides exchanged small incidents in the Strait, but the ceasefire held. Today, Friday: gold steady near $4,739 ahead of the April jobs report.

What changed fundamentally is the oil-inflation link that has been suppressing gold since the war began in February. When Hormuz was blocked, oil surged past $106, which drove inflation fears, which kept the Fed restrictive, which suppressed gold. As a peace deal comes into focus, oil retreats, inflation fears ease, the case for rate cuts revives, and gold’s structural tailwinds — central bank buying, mine supply constraints, the weak dollar trend — all come back to the surface simultaneously. Global gold demand hit a record high of 1,230.9 tonnes in Q1 2026, up 2% year-on-year, a fact that got lost in the noise of the war. That demand never went away.