Gold Prices Surge on Hormuz Hopes and Fed Rate Bets

Gold prices surged to their strongest point in eight weeks on Tuesday, driven by hopes of a potential accord to restore passage through the Strait of Hormuz.

The precious metal climbed to $4,495.00 per ounce, a 1.7% advance, before easing to $4,440.00, still up 0.5%, by midday in New York.

Spot bullion hovered near $4,395, having earlier gained as much as 1%. The precious metal has clawed back all losses from the drop below $4,000 two weeks ago, supported by last week's surprising contraction in US employment and sustained central bank purchases.

A less aggressive tightening path tends to benefit gold, given its lack of yield. However, longer-term investors are waiting for a decisive move back above the 200-day moving average before re-entering the market.