Gold Surges 3% to $4,199 as US-Iran Peace Hopes Ease Inflation Fears

The price of gold surged to its highest level in a month on Wednesday, reaching $4,199 per ounce after a 3% daily increase.

This rally marked the third consecutive day of gains for the precious metal, driven by improving economic factors and reduced concerns about inflation rising due to peace hopes between the United States and Iran.

A potential deal to reopen the Strait of Hormuz has lowered oil prices and energy costs, which could ease inflation pressure. The prospect of supply disruptions easing also contributed to the decline in oil prices.

The Federal Reserve's next interest rate decisions are now in question as investors price in a smaller chance of a September rate hike, with the probability falling from 67% to 56%, according to CME Group data.