Gold Soars on Iran Deal Hopes and Dovish Fed Outlook
Gold prices surged to a seven-week peak on Thursday, reaching $4,270.29 per ounce in spot markets and $4,329.15 in futures contracts.
The precious metal's value increased by 0.6% and 0.5%, respectively, as market participants reacted to emerging reports of a potential agreement between Iran and Oman regarding the Strait of Hormuz.
A temporary deal would grant Iran authority over maritime traffic navigating into the Gulf via the strait, which could suppress crude prices and diminish Federal Reserve incentive for monetary tightening.
Crude prices declined by more than 9% in the past week, with Brent crude currently trading below $80 per barrel.
The drop in energy costs typically weakens inflation projections, making it less likely for the Federal Reserve to raise interest rates.