Gold Surges on Easing Rate Hike Expectations, Strait of Hormuz Hopes

Gold's price surged yesterday as bulls pushed the precious metal higher, breaking above the $4205 resistance line and leaving market observers wondering if it will continue to rise.

The rally was sparked by easing expectations of a US Federal Reserve interest rate hike, combined with hopes for a resolution to the Strait of Hormuz crisis and a slight weakening of the US dollar in foreign exchange markets.

With Fed Chair Warsh's mixed messaging on inflationary pressures still resonating, some market analysts believe that gold's price may continue to gain if worries about inflation in the US economy ease further.

In other news, the US dollar stabilized ahead of tomorrow's employment report, while the Canadian dollar rose as traders prepared for the simultaneous release of Canada's July employment data.