Gold Futures Soar Amid US-Iran Tensions in Strait of Hormuz
Gold futures surged on Thursday, September 3, amidst heightened tensions between the US and Iran in the Strait of Hormuz. The December gold contract opened at $4,436.40 per ounce, up 0.5% from Wednesday's close, before reaching an intraday high of $4,470.70 by 6:53 a.m. EDT.
The price jump was driven by US airstrikes against Iranian targets over the past two days in retaliation for attacks on commercial vessels in the region. Market expectations suggest that the military exchange will remain contained, following US President Donald Trump's description of the US response as 'a very heavy attack' that won't take 'too long.'
The gold price action was a stark contrast to its recent four-session losing streak, which saw it hit a three-week low of $4,304.01. This weakness followed hawkish rhetoric from US Federal Reserve Chair Kevin Warsh at the Jackson Hole Economic Policy Symposium, which boosted US treasury yields and strengthened the dollar.
However, investors have begun to focus on the relationship between US public debt, Treasury yield curve management, and the performance of the dollar, rather than traditional views linking gold to geopolitics or inflation. The World Gold Council reported that central banks purchased 289 tons of gold in the second quarter, a 62% year-over-year increase led by China and Poland.