Gold Pulls Back from High as Oil Prices Surge Amid Hormuz Tensions

Gold prices retreated on Tuesday, pulling back from a more than two-month high, as oil prices rose nearly 2% amid ongoing tensions over the Strait of Hormuz. The precious metal market is now waiting with bated breath for key inflation data due out later this week.

The conflict between Iran and the US has led to rising oil prices in recent sessions, with traders on high alert for any sign of a breakthrough or agreement on reopening the vital waterway. Oil prices surged nearly 2% on Tuesday following a 5% increase in the previous session.

Iran has been in discussions with Oman to create a framework for managing the strait, but its leader, Mohammad Mokhber, stated that the Strait of Hormuz will not be opened until Iran's conditions are met. These conditions include the lifting of an American naval blockade, the removal of sanctions, and compensation for war damage.

The inflation data due out later this week is expected to provide key rate cues, with economists predicting a moderate increase in both headline and core consumer price indices (CPI). The US consumer price index (CPI) and producer price index (PPI) reports for July are scheduled for Wednesday and Thursday, respectively.