Gold Prices Surge to Two-Month High on Hormuz Tensions, Oil Price Reversal

Gold prices surged to a two-month high on Tuesday, reaching $4,495.00 an ounce, before retreating as oil prices turned higher ahead of a US inflation reading that will inform the Federal Reserve's interest rate decisions.

The move comes after signs emerged of a possible agreement that would ease tensions in the Strait of Hormuz, which could lead to cheaper crude and reduce pressure on the Fed to raise rates. Lower borrowing costs tend to be supportive of gold, as it pays no interest.

Ole Hansen, head of commodity strategy at Saxo Bank, said that for gold's recent rally to continue, it needs to hold between $4,360 and $4,370 an ounce. Spot gold is currently trading barely above this range.