Gold Soars to Seven-Week High as Middle East Diplomatic Hopes Build
Gold prices surged to their highest level in seven weeks on Thursday as hopes for a diplomatic breakthrough in the Middle East continued to grow. The metal, seen as a safe-haven asset, advanced for a fourth consecutive session, driven by a softer US dollar and lower Treasury yields.
The spot price of gold rose 0.5% to $4,265.22 per ounce, while US gold futures increased by the same margin to $4,324.60. This marked the metal's biggest daily gain since February.
Analyst Tony Sycamore attributed the rally to growing optimism that a deal is close to being finalized between Iran and Oman, which would give Tehran control over ships entering the Gulf through the Strait of Hormuz. This, in turn, could reduce pressure on oil prices and interest rates, creating a favorable environment for gold.
Market expectations for a September US rate hike have eased to 55% from 67% two days earlier, while the yield on benchmark U.S. 10-year notes fell and the US dollar index came under pressure. A weaker US currency makes dollar-priced commodities cheaper for other currency holders.