Gold Hits 7-Week High on Weaker Dollar and Optimism Over Strait of Hormuz Reopening
Gold prices extended their rally for the fourth consecutive session, reaching their highest levels in seven weeks. The surge was supported by a retreating U.S. dollar and falling Treasury yields, alongside growing hopes for an agreement to reopen the Strait of Hormuz and end months of tension between the United States and Iran. This geopolitical optimism has bolstered the appeal of the precious metal amid cooling expectations for tighter U.S. monetary policy.
Spot gold rose by approximately 0.5% to $4,265.22 per ounce by 06:30 GMT, after earlier touching its highest level since June 18, 2026, briefly breaking above the $4,300 mark.
Similarly, U.S. gold futures climbed by 0.5% to $4,324.60 per ounce. This follows Wednesday's trading session, where the yellow metal recorded its largest single-day gain since last February.
Weaker Dollar and Rates Boost Gold's Appeal
The recent gains in gold were largely fueled by mounting optimism regarding diplomatic progress in the Middle East. Reports indicate that a proposed agreement between Iran and the Sultanate of Oman could help bring an end to the five-month conflict between Tehran and Washington, potentially granting Iran a role in regulating maritime traffic passing through the Strait of Hormuz.
Analysts suggest that any breakthrough in this crisis could alleviate pressure on global oil prices and significantly temper inflation fears. Consequently, this would reduce the necessity for central banks to hike interest rates—a scenario that highly favors gold, as the non-yielding asset typically thrives in low-interest-rate environments.
Tony Sycamore, a market analyst at IG, pointed out that gold holding above its 200-day moving average could pave the way for a more robust upward trend. If current supportive macroeconomic and geopolitical factors persist, this momentum could potentially propel prices toward the $5,000 per ounce level in the medium term.