Gold Price Movement
At 00:57 ET (04:57 GMT) gold spot (XAU/USD) rose 0.4% to $4,262.54 an ounce, while gold futures (GC) gained 0.4% to $4,321.65. Silver (XAG/USD) added 0.2% to $62.17 an ounce and platinum (XPT/USD) climbed 1.3% to $1,756.50. The metal remained near a seven‑week high despite modest profit‑taking.
Geopolitical Developments
Reuters reported that Iran and Oman are negotiating a proposed agreement that would end a five‑month conflict between Tehran and Washington and give Iran control over vessels entering the Gulf through the Strait of Hormuz. The prospect of the deal lowered oil prices, easing concerns about disruptions to global energy supplies.
Implications for Federal Reserve Policy
The optimism surrounding the Hormuz agreement reduced expectations for further Federal Reserve tightening. Market pricing for a September rate hike fell to roughly 55%, down from about 67% earlier in the week. Fed Governor Lisa Cook was quoted as saying policymakers remain prepared to raise rates if inflation does not slow, emphasizing that the Fed cannot wait for inflation to reach its 2% target.
Market Drivers
Lower Treasury yields and a subdued US Dollar Index continued to underpin bullion, making the non‑yielding metal more attractive relative to other assets. The combination of easing energy‑price pressures and a softer dollar supported gold’s resilience.
Upcoming Economic Data
Investors are now focused on U.S. labor‑market releases. The ADP National Employment Report showed a slowdown in private‑sector hiring for July, and attention will shift to Friday’s non‑farm payroll report for further clues on the Fed’s policy path.
Analyst Commentary
ANZ analysts noted that gold’s rally gathered momentum as hopes of reopening the Strait of Hormuz reduced inflationary pressures, making additional Fed rate hikes appear less likely. They also highlighted that gold broke above a key technical resistance level, reinforcing the bullish bias.