Gold falls below $4,600 as Strait of Hormuz tensions ease

Gold fell sharply on Tuesday, pulling back from the $4,700 level as reports that the US Navy had cleared shipping lanes in the Strait of Hormuz tempered safe-haven demand that had driven the precious metal higher in recent weeks.

XAU/USD declined to around $4,641, with two US officials confirming to Axios that the Navy had cleared the traffic separation scheme in the strait, according to VT Markets. By Wednesday, gold continued its retreat, falling to approximately $4,597, down more than 1.3% from the previous session, according to Trading Economics.vtmarkets+1

Easing of a Months-Long Crisis

The pullback comes after gold surged more than 12% over the past month, fueled by escalating geopolitical risk tied to the Strait of Hormuz crisis. Iran has largely blocked shipping traffic through the waterway — a critical chokepoint for global energy trade — since late February 2026, when the United States and Israel launched an air campaign against Iran. Reuters reported in mid-August that transit through the strait had ground to a near standstill after further ship attacks.reuters+2

The apparent clearing of naval routes marks a potential de-escalation in the crisis, reducing the geopolitical premium that had propelled gold from around $3,900 in July to near $4,700 by late August. Fortune reported gold trading at $4,674 on the morning of August 24, reflecting a $604 increase from just three days earlier.babypips+1

Mixed Data and Fed Uncertainty

Beyond geopolitics, mixed US economic data added to the retreat. The Conference Board Consumer Confidence reading came in at 90.2, in line with expectations, while building permits rose 4.3% in July. Rate markets priced a 43% probability of a 25-basis-point Federal Reserve hike in September, with the remaining 57% favoring no change ahead of Fed Chair Kevin Warsh's upcoming Jackson Hole address.vtmarkets

Technical Outlook

Gold's daily Relative Strength Index had retreated from overbought territory above 70, a signal that has historically preceded 3% to 5% corrections in the metal. Support sits at the $4,600 mark, followed by the 200-day simple moving average near $4,519. Analysts note that while the short-term pullback may continue, structural drivers including central bank purchases and inflation concerns remain intact.cryptorank+1