Gold Hits One-Month High on US-Iran Peace Hopes, Rate Hike Odds
Gold prices reached a one-month high on Wednesday as hopes of a US-Iran peace deal reduced inflation concerns, causing investors to seek safe-haven assets. Spot gold rose 2.2% to $4,164.13 per ounce by 0836 GMT, its highest level since July 7.
US President Donald Trump said his administration had 'very good discussions' with Iran during all-day negotiations on Tuesday, fueling expectations of an imminent end to the five-month conflict. Market analyst Jamie Dutta noted that increasing signs of a Gulf ceasefire deal were causing Treasury yields to move lower due to easing inflation worries, making non-yielding assets like gold more attractive.
The US dollar remained under pressure, making greenback-priced metals more appealing to holders of other currencies. Meanwhile, the CME FedWatch Tool showed traders now pricing in a 59% probability of a September rate hike, down from 67% a day earlier.