Gold Surges on Easing Rate Hike Concerns and Strait of Hormuz Diplomacy

Gold prices have reached a seven-week high after easing concerns over inflation and higher interest rates. According to data, spot gold was up 0.40% at $4,261.86 per ounce by 11:25 GMT, with US gold futures rising 0.40% to $4,321.40.

Nikos Tzabouras, senior market analyst at Tradu.com, attributed the gains to hopes of a diplomatic breakthrough in the Strait of Hormuz crisis. A proposed deal between Iran and Oman would give Tehran control over ships entering the Gulf through the Strait, easing inflationary fears and reducing aggressive Federal Reserve tightening bets.

Market expectations for a September US rate hike have eased to 55% from 67% two days earlier. However, gold remains vulnerable to renewed pressure, with lingering price pressures keeping rate-hike dissenters active.