Gold Jumps Above $4,230 on Hormuz Deal Optimism and Dovish Fed Bets
Gold rose more than 3% to around $4,230 an ounce as progress toward a Strait of Hormuz deal eased inflation fears and lowered expectations for further Federal Reserve rate hikes.
Gold extended its rally for a third straight day, climbing over 3% to trade near $4,230 per ounce. Markets tracked signs of a potential agreement to reopen the Strait of Hormuz, which helped cool oil prices and dampen inflation concerns. The dollar weakened alongside fading expectations for aggressive Federal Reserve tightening.
Traders now see only one more US rate increase this year, down from two previously. This repricing benefits non-yielding assets like gold. Additionally, strong demand from China provided a tailwind, with inflows into Chinese gold-backed ETFs continuing for a 14th consecutive day, signaling robust investor appetite in the world's largest bullion market.
Lower bond yields and a softer greenback supported the move, while declining crude prices further reduced headline inflation risks. The combination of geopolitical de-escalation hopes and a more cautious central-bank outlook kept gold well bid above key technical levels.
Source: First Squawk