Gold Soars as Strait of Hormuz Progress Eases Rate-Hike Odds

Gold prices surged to their largest gain in six months on August 6 as progress in reopening the Strait of Hormuz eased pressure on the Federal Reserve to raise interest rates.

The precious metal rose by 1% to $4,347.90 an ounce, following a 4.1% increase in the previous session - its biggest rise since February 3.

Iran's agreement with Oman on a proposed shipping route through the strait raised hopes of some energy flows resuming through the critical waterway.

However, Iranian Deputy Foreign Minister Kazem Gharibabadi clarified that this understanding is temporary and would remain active for 'two to four months', adding it does not mean the full reopening of the strait.

The development reduced pressure on the Federal Reserve to raise interest rates, with markets now fully pricing in only a single rate increase by year-end - down from two as recently as last week.