Gold Shoots to Seven-Week High as Iran Deal Could Change the Game for Rate Hikes

TLDR

• Gold is trading near a seven-week high, with spot gold at $4,270.29 and futures at $4,329.15 per ounce
• Optimism over a potential Strait of Hormuz deal between Iran and Oman is easing inflation fears
• Oil prices have fallen more than 9% over the past week, reducing pressure on the Fed to raise rates
• Markets now price a 43% chance the Fed holds rates steady in September, up from 37% a week ago
• A weaker US dollar is making gold cheaper for overseas buyers, adding further support

Gold is holding near its highest level in seven weeks as hopes grow that a deal to reopen the Strait of Hormuz could lower oil prices and reduce pressure on the Federal Reserve to raise interest rates.

Spot gold rose 0.6% to $4,270.29 an ounce on Thursday. Gold futures climbed 0.5% to $4,329.15 an ounce.

New York gold futures were also up 0.2% to $4,314 a troy ounce in early trading, putting the metal up nearly 4% for the week.

Hormuz Deal Optimism Eases Inflation Fears

Reports suggest a proposed agreement between Iran and Oman would give Iran control over vessels entering the Gulf through the Strait of Hormuz. US officials have said this week that a deal could be close.

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