XAU/USD surges to $4,255 on easing inflation fears tied to potential Strait of Hormuz reopening, reducing Fed tightening expectations.
Gold prices (XAU/USD) rose to $4,255 in early Asian trading Thursday, extending a rally fueled by optimism over a US-Iran deal to reopen the Strait of Hormuz. The move marks the metal’s largest daily gain since February, driven by reduced energy-driven inflation fears and lower odds of Federal Reserve rate hikes.
The rally follows comments from Iran’s Foreign Ministry and US officials suggesting progress on an agreement to secure the critical waterway. A deal could ease supply concerns, temper inflation, and diminish expectations for aggressive Fed tightening, supporting non-yielding assets like gold.
Traders are now eyeing Friday’s US July employment report, with economists forecasting an 80,000 rise in Nonfarm Payrolls and steady unemployment at 4.2%. Stronger-than-expected data could revive rate hike bets, pressuring gold.