Gold (XAU/USD) climbs to a one-month high on Wednesday as renewed optimism over the reopening of the Strait of Hormuz sends Oil prices lower.
At the time of writing, XAU/USD trades around $4,155, up nearly 1.90% on the day
US President Donald Trump said Washington had “very good discussions” with Iran during day-long negotiations on Tuesday. Trump added that the Strait “is going to be open very soon.” Axios reported that the United States, Iran and Oman are nearing an interim deal that could be announced as early as Wednesday. The proposed deal would establish a temporary 60-day arrangement between Iran and Oman to restore shipping.
Strategists at ING note that “lower energy prices have eased some inflation concerns, offering a more supportive backdrop for bullion,” even as investors continue to weigh the policy outlook. They point out that “markets continue to assess the outlook for US monetary policy following last week’s Federal Reserve meeting,” leaving Gold “caught between improving geopolitical sentiment and ongoing uncertainty over US interest rates.” Can Gold move higher from here? Despite improving market sentiment, the US Dollar (USD) is showing only limited weakness as traders await concrete signs that shipping through the Strait will resume.