Washington, DC – Gold prices surged more than 2%, breaking the $4,200 per ounce mark, amid growing global optimism about a potential temporary agreement to reopen the Strait of Hormuz. In market trading, the dollar and metals pair jumped significantly. Gold futures climbed 1.7% to $4,222.92 per ounce.
Following the gold price surge, silver (XAG/USD) rose 3.2% to $61.45 per ounce, while platinum climbed 1.8% to $1,768.95.
Gold extended its gains for a third consecutive session, supported by a slight decline in the US dollar index. This increased the appeal of the precious metal to international buyers. This rebound came amid intense diplomatic activity. In fact, Qatar announced a draft proposal to restore shipping traffic through the vital waterway. Meanwhile, reports indicated that Washington, Tehran, and Muscat were close to announcing an agreement. This agreement would be overseen by Treasury Secretary Scott Bisnett. The prospect of lower oil prices has dampened expectations of monetary policy tightening. As a result, markets are pricing in only one interest rate hike by the end of the year.
On the monetary policy front, uncertainty still surrounds the Federal Reserve’s path after three policymakers opposed the recent decision to hold rates steady. They called for an interest rate hike to combat inflation caused by supply shocks. Meanwhile, gold received strong support from Asian markets. In particular, Chinese exchange-traded funds (ETFs) recorded inflows for the fourteenth consecutive day. This helped keep prices above $4,000. It also confirmed continued supportive Chinese institutional demand for the market despite global economic challenges.
