Gold Surges Past $4,300 as Iran-Oman Deal Eases Rate-Hike Bets

Gold prices surged this week, reaching as high as $4,278.02 an ounce on Thursday, August 6, according to Trading Economics data. The metal has rallied nearly 6% in just a few days, surpassing the $4,300 mark intraday, as reported by Free Malaysia Today.

The catalyst for this increase isn't a ceasefire, but rather a shipping deal between Iran and Oman. The two countries agreed on a temporary corridor through the Strait of Hormuz, which has reduced disruption risk and subsequently lowered oil prices. This, in turn, has led to lower inflation expectations, making it less likely that the Federal Reserve will raise interest rates.

Markets are now pricing in just one Fed rate hike by year-end, down from two a week earlier. The ADP data showed private employers added only 44,000 positions in July, the weakest reading since January and well below expectations.

Gold's rally has been accompanied by a shift in sentiment, with Goldman Sachs, HSBC, and StoneX trimming their year-end targets into the $4,000 to $4,900 range. However, J.P. Morgan remains bullish, projecting gold near $6,000 an ounce by the end of the year.