XAU/USD trades at $4,270 after a 4% rally on Wednesday amid easing geopolitical tensions in the Strait of Hormuz.
Gold prices stabilized near $4,270 on Thursday, extending a 4% gain from the previous session as traders awaited confirmation of a potential Iran-Oman agreement on the Strait of Hormuz. The precious metal reached a seven-week high after Iran announced progress on a proposed shipping route, easing supply concerns in the region.
The rally followed a 0.53% daily gain, supported by softer oil prices and reduced inflation fears. Lower energy costs could ease pressure on central banks, including the Federal Reserve, to raise interest rates, benefiting non-yielding assets like gold. However, persistent Middle East tensions kept a geopolitical risk premium in oil markets.
Iran clarified that the agreement with Oman would establish only a temporary route and not fully reopen the Strait. Meanwhile, Yemen’s Houthis claimed attacks on Saudi oil tankers, and Tehran denied U.S. negotiations, limiting gold’s upside momentum.