Gold, Silver Soar on Hopes for Hormuz Reopening
Gold and silver surged on August 5th as markets reacted to efforts to reopen the Strait of Hormuz. The precious metals jumped following a draft proposal by Qatar to normalize shipping in the waterway, which eased concerns about inflation and reduced the likelihood of higher interest rates from the Federal Reserve.
The price of spot gold climbed 2.1% to $4,164.21 an ounce at 8:31 am in London, while silver surged 3.4% to $61.58 an ounce. Platinum and palladium also rose in value.
Markets are now fully pricing in a single US rate increase by the end of the year, down from two as recently as last week. This decrease in monetary tightening is generally positive for precious metals like gold, which generate no yield.
In recent weeks, Chinese institutional investors have shown support for bullion, helping to arrest its decline and keep prices above the $4,000-an-ounce threshold.