Gold Soars to Seven-Week High Amid Hormuz Tensions
Gold prices surged on Thursday, reaching their highest level in seven weeks. The precious metal rose for a fourth consecutive session, buoyed by a softer US dollar and market optimism that a diplomatic breakthrough is near in the Middle East.
The Strait of Hormuz, a key shipping route, is at the center of tensions between Iran and the US. A proposed deal between Iran and Oman could see Tehran gain control over ships entering the Gulf through the strait, reducing pressure on oil prices and interest rates.
Gold has been under pressure since the start of the US-Iran conflict in February, with spot gold declining 19% to $4,254.98 per ounce by 0636 GMT. However, market expectations for a September US rate hike have eased to 55% from 67% two days earlier.
IG market analyst Tony Sycamore noted that a sustained break above the 200-day moving average could pave the way for a stronger recovery toward the $5,000 mark.