Gold Soars on Strait of Hormuz Hopes as Fed Rate Hike Bets Eased
Gold prices touched their highest level in seven weeks on Thursday, driven by hopes for the reopening of the Strait of Hormuz and easing inflationary fears.
The spot gold price rose 0.6% to $4,271.33 per ounce, with US gold futures also up 0.6% to $4,330.20. This marks a fourth consecutive session of gains for gold, which has been bolstered by optimism around the proposed deal between Iran and Oman.
Nikos Tzabouras, senior market analyst at Tradu.com, noted that hopes for a diplomatic breakthrough are easing inflationary fears and reducing aggressive Fed tightening bets. Market expectations for a September US rate hike have eased to 55% from 67% just two days earlier.
However, some analysts remain cautious, with Tzabouras warning that gold remains vulnerable to renewed pressure and fresh lows. This is due in part to lingering price pressures and geopolitical risks that could quickly resurrect downside dynamics if a diplomatic setback occurs.