Gold Prices Spike as Dollar Declines and Iran Peace Talks Progress
Gold prices rose sharply on Wednesday to their highest level in almost seven weeks due to lower Treasury yields and hopes for progress on opening the Strait of Hormuz. The precious metal climbed 4.1% to $4,242.96 per ounce by 12:50 p.m. ET, breaking above its 50-day moving average of $4,160.
The dollar's decline against major currencies and President Donald Trump's announcement that his administration had 'very good discussions' with Iran during all-day negotiations also contributed to the surge in gold prices.
Tai Wong, an independent metals trader, attributed the rise in gold prices to early adopters buying back into precious metals due to falling rate hike likelihoods and a weaker dollar. The lower dollar makes gold cheaper for overseas buyers while falling yields reduce the opportunity cost of holding gold.