Gold (XAU/USD) catches a fresh bid on Tuesday as traders react to encouraging headlines about the possible reopening of the Strait of Hormuz.
At the time of writing, XAU/USD trades around $4,087, recovering from an intraday low near $4,042
In an interview with CNBC, US Treasury Secretary Scott Bessent said, “We are in talks with the Iranians,” adding that “there is a chance we may have a deal today or tomorrow to open the Strait and move towards a more normalized position in this conflict.” Separately, Al Arabiya reported, citing a high-ranking source, that an announcement on reopening the Strait of Hormuz is expected shortly. However, no official confirmation has been released. The latest developments lifted market sentiment, sending the US Dollar (USD) and Oil prices lower.
West Texas Intermediate (WTI) fell towards $75.50, its lowest level in three weeks. Lower Oil prices ease inflation risks and reduce pressure on the Federal Reserve (Fed) to raise interest rates. The move also dragged US Treasury yields lower, providing additional support to Gold.