Hormuz Hopes Weaken USD, Gold Stuck in Range
The US Dollar came under mild selling pressure on Tuesday as hopes for a deal to reopen the Strait of Hormuz rose, putting pressure on the Greenback. US Treasury Secretary Scott Bessent said that a deal with Iran to reopen the Strait could be reached as soon as Wednesday in an interview with CNBC.
The news fueled risk appetite, pushing stock markets up and modestly weakening the USD. However, this was barely enough to lift precious metals within range, with XAU/USD surging towards $4,090 but still confined within July's tight range.
US employment figures are also on tap for the week, starting with the ADP Employment Change report on Wednesday and followed by the Nonfarm Payrolls (NFP) report on Friday. While these data points may influence future Federal Reserve monetary policy decisions, they may not have a significant impact on the USD as long as labor market data shows stability.
From a technical perspective, XAU/USD is mildly bullish in the near term, with spot holding above clustered simple moving averages and the RSI indicator aiming north at 57. However, the daily chart remains neutral, with the metal well below its broader backdrop bearish trend lines.