Gold Prices Hold Firm Amid Fading Iran Agreement Expectations

Despite fading expectations for an Iran agreement, gold prices have remained steady to modestly firmer last week. According to Heraeus precious metals analysts, the situation around a possible accord to reopen the Strait of Hormuz remains clouded with negotiations effectively stalled.

Crude shipments through the waterway have been close to nil since early July, while inventories continue to dwindle, yet oil prices remain well below the levels recorded when the conflict first escalated. The spread between Brent and WTI stood near $6 per barrel on 14 August, wider than the $4 per barrel observed on 5 August.

Heraeus views the latest economic figures as generally constructive for bullion. Alongside soft employment numbers, US consumer price inflation at 3.4% and producer price inflation at 4.7% matched or fell short of forecasts. Consequently, the two-year Treasury yield has dropped by roughly 20 basis points.

Barrick Gold's output remains aligned with its annual target, according to Heraeus. Attributable gold production came to 796,000 ounces, an 11% sequential increase from 719,000 ounces and above the 730,000-770,000 ounce quarterly projection.