Gold Rises as Traders Weigh Hormuz Deal and US Inflation Data

Gold prices rose on Wednesday as traders weighed the prospects for a deal to reopen the Strait of Hormuz and awaited US inflation data that could provide clues on the Federal Reserve's interest-rate path.

The precious metal climbed 0.7% to $4,401.57 an ounce by 11:45 a.m. in Singapore, rebounding after pulling back from a two-month high a day earlier.

Pakistan's defense minister said that the US and Iran are 'close to some sort of arrangement' to reopen the waterway, even as both sides appeared to toughen their stances on the crucial global energy route.

However, momentum for a more aggressive monetary policy could build if higher energy prices exert more inflationary pressure, which would be negative for gold, said Ole Hansen, head of commodity strategy at Saxo Bank AS.