Shares of iShares Gold Trust jumped 4.36% to $84.18 on September 26, after reports of U.S.-Iran diplomatic discussions over reopening the Strait of Hormuz — a narrow waterway through which roughly a fifth of the world's oil flows — converged with a softer dollar and falling crude prices to ignite a sharp gold rally. Gold Trust Rallies 4.4% on Hormuz Diplomacy and a Weakening Dollar — But Does the Move Outrun the Fundamentals?
Shares of iShares Gold Trust surged 4.36% to $84.18 on September 26, as a confluence of geopolitical and currency forces collided: reports that U.S. and Iranian negotiators were exploring a deal to reopen the Strait of Hormuz sent crude oil lower, eased inflation fears, and weakened the dollar — all classic fuel for a gold rally. The move snapped a week of drift that had pinned IAU between $80.30 and $82.03, and it raises a sharp question: is this diplomacy-driven pop sustainable, or a one-day overshoot?
A Seven-Month Crisis Suddenly Looks Solvable — and Oil Dropped
The Strait of Hormuz has been largely blocked by Iran since February 28, 2026, after the U.S. and Israel launched strikes against Iran.
Crude oil traded near $95 a barrel on Thursday before trimming gains as reports suggested U.S. and Iranian negotiators were exploring a deal to lift naval blockades and ease sanctions. By Friday, crude fell to $92.55, down 2.18% from the prior day. Lower oil means less pressure on consumer prices — and less reason for the Fed to keep tightening, a dynamic that historically sends gold higher.
The Dollar's Winning Streak Cracked at the Worst Time for Bears
The dollar index had risen for four consecutive sessions to 101.2, its longest winning streak since May. But the easing of geopolitical risk and softer inflation expectations pulled the greenback back. Because gold is priced in dollars, a weaker dollar makes it cheaper for foreign buyers, lifting demand. That mechanical relationship amplified IAU's move.
Gold Was Already Technically Compressed — Setting Up a Snap
Gold had been "stuck in a bit of a technical no-man's land," hovering above its 200-day moving average around $4,340 and capped below the 50-day at $4,730.
Gold traded around $4,270 on Friday and had been on track to decline more than 2% for the week. That tight range meant even a modest catalyst could trigger outsized moves in ETFs that track the metal. Still, a 4.4% single-session jump in IAU considerably exceeds what a 0.4% rise in spot gold explains, suggesting after-hours positioning or flows beyond the underlying metal's move.
What Shareholders Should Watch
The U.S. Energy Information Administration forecasts Middle East oil flows will gradually increase but expects constraints to persist through year-end, keeping regional production below pre-conflict levels until mid-2027. If diplomacy stalls, oil re-spikes, inflation expectations reset higher, and the Fed tightens further — all headwinds for gold. IAU's rally is real, but its staying power depends on a peace deal that remains, at best, aspirational.