Gold Soars to One-Month High on US-Iran Peace Deal Hopes

Gold prices reached a one-month high on Wednesday after hopes of a US-Iran peace deal eased inflation concerns. The precious metal rose more than 2% to $4,164.13 per ounce, its highest level since July 7.

The uptick in gold prices comes as the conflict between the two nations appears to be de-escalating. US President Donald Trump said his administration had 'very good discussions' with Iran during all-day negotiations on Tuesday, fueling expectations of an imminent end to the five-month conflict.

Market analyst Jamie Dutta noted that increasing signs of a Gulf ceasefire deal are contributing to lower Treasury yields and easing inflation worries, making non-yielding assets like gold more attractive. The US dollar remained under pressure, further boosting gold prices.

However, not all analysts agree on the implications of the potential peace deal. Climate and commodities economist Hamad Hussain at Capital Economics predicts that concerns about the Fed's credibility will ease as the central bank raises interest rates over the coming months, resulting in gold prices falling below $4,000 per ounce by the end of the year.

Investors are now awaiting key US jobs data for clues on the Federal Reserve's policy path. The ADP employment report is due at 1215 GMT and the July nonfarm payrolls report is scheduled for Friday.