Gold Jumps on Hormuz Deal Hopes, Technical Breakout

Gold prices surged by over 4% to around $4,250 an ounce on Wednesday, marking its largest jump since February. The rally was fueled by reduced expectations for Federal Reserve rate hikes and a technical breakout above a key resistance level.

The Strait of Hormuz situation appears to be improving, with US President Donald Trump suggesting that a deal is possible as early as Wednesday. This development has reduced the likelihood of higher interest rates in the US, making gold more attractive to investors.

Nicky Shiels, head of metals strategy at MKS PAMP, expects gold and other assets to continue climbing ahead of the Fed's September meeting. Gold prices had been trading sideways for much of the past few weeks after a strong rally earlier this year, leaving room for prices to move higher again.