Gold Holds Firm Amid Hopes for Hormuz Deal
Gold prices remained stable near seven-week highs during Thursday's trading (Aug 6). XAU/USD hovered around US$4,269 per troy ounce after previously breaching the US$4,300 mark.
Gold surged more than 4% on Wednesday after Iran announced it had reached an understanding with Oman regarding a temporary shipping route in the Strait of Hormuz. The market is now awaiting official announcements from both nations.
Falling oil prices have provided a positive boost for gold. Lower energy costs could alleviate inflationary pressures and reduce the likelihood of the Federal Reserve raising interest rates again.
However, geopolitical risks have not fully dissipated. The route agreed upon by Iran and Oman is merely temporary and does not signify a full reopening of the Strait of Hormuz. The threat of attacks on oil tankers also keeps the market cautious.
From the United States, weaker ADP and JOLTS data led the market to scale back expectations for Fed rate hikes. Although jobless claims rose only slightly to 199,000, the probability of a September rate hike fell to approximately 56.9%.
Newsmaker Analysis: Gold remains in a bullish trend, though its upward momentum has stalled following the sharp rally. As long as the price holds above US$4,250, there is potential to retest the US$4,300 level. Conversely, a failure to break through that level could trigger profit-taking ahead of the Non-Farm Payrolls (NFP) release.
Source: Newsmaker.id
