Gold Holds Sharp Gain as Strait of Hormuz Reopens, Easing Fed Rate Pressure
Bullion stabilised near $4,260 an ounce after its biggest one-day jump since early February, while rate markets slashed expectations for U.S. tightening.
Gold prices steadied near $4,260 an ounce after rallying 4.1% in the previous session — the strongest daily gain since Feb. 3. The surge came as progress toward reopening the Strait of Hormuz reduced immediate geopolitical risks and dampened the urgency for further Federal Reserve rate hikes.
Markets now fully price in only one U.S. interest rate increase by the end of the year, down from two expected just a week ago. The shift reflects a view that easing supply-chain pressures and calmer energy transit routes will give the Fed less reason to tighten aggressively.
Gold’s sharp rebound highlights how quickly macro sentiment can pivot when central bank expectations change. The metal had been under pressure in recent weeks from a hawkish Fed outlook, but the strait’s reopening removed a key supply threat that could have forced the central bank’s hand.
Source: First Squawk