Gold Surges to One-Month High Amid US-Iran Optimism and Dollar Weakness

Gold prices surged to a one-month high on Wednesday as market optimism around a potential US-Iran peace agreement and a weakening dollar sent investors scrambling for safe-havens. The Strait of Hormuz, a critical oil shipping route, remains closed due to tensions between the two nations.

The expected reopening of the strait has led to lower oil prices, prompting traders to scale back expectations of higher interest rates from the Federal Reserve before year-end. This shift in sentiment has weakened the US dollar against major currencies, benefiting gold in its inverse relationship with the greenback.

Investors will closely monitor developments in the Persian Gulf while keeping a watchful eye on this week's US labour market data, culminating in Friday's Non-Farm Payrolls report. Strong employment figures would strengthen the case for tighter monetary policy and potentially weigh on gold prices, while weaker-than-expected data could reduce interest rate hike expectations and support the precious metal.