Gold Soars on Hormuz Deal Hopes and Technical Breakout
Gold prices surged more than 4% to around $4,250 an ounce on Thursday, marking the largest jump since February. The rally gained momentum after a possible deal to reopen the Strait of Hormuz reduced expectations for US Federal Reserve rate hikes.
The news of a potential agreement sent the US dollar lower and US oil prices extending losses. Markets are now fully pricing in a single US rate increase by the end of 2026, down from two as recently as last week.
Nicky Shiels, head of metals strategy at MKS PAMP, said gold's rally gained momentum after prices broke above a key technical resistance level. She expected gold and other assets to continue climbing ahead of the US Fed's September meeting, particularly if inflation remains above 2% target.