Gold Surges to Two-Week High Amid Iran Deal Hopes and Fed Rate Hike Bets

Gold prices surged to a nearly two-week high on Wednesday as optimism over a potential US-Iran deal and receding Federal Reserve rate-hike bets weighed on the US dollar. The yellow metal broke above $4,100, with some analysts suggesting it could struggle to gain further momentum if buying enthusiasm fades.

Investors remain hopeful about a diplomatic resolution to end the five-month-old US-Iran conflict, with US Treasury Secretary Scott Bessent indicating that a deal could be reached by Wednesday. The OPEC+ decision on Sunday to increase production from September also helped ease supply concerns and alleviate inflation pressures, which had been supporting gold's recent gains.

However, traders are still pricing in a greater chance of a Federal Reserve rate hike by the end of this year, with some analysts pointing to signs that the US labor market is beginning to find its footing. The upcoming Nonfarm Payrolls report on Friday will be closely watched for further clarity on monetary policy.