On Wednesday, gold prices increased for a third consecutive session, following indications of potential progress toward reopening the Strait of Hormuz. This development alleviated concerns that extended disruptions to global energy supplies would sustain elevated inflation.
Qatar said a proposal had been drafted to restore shipping through the vital waterway, while Axios reported that Washington, Tehran and Oman were close to reaching an agreement. U.S. officials are targeting an announcement as early as Wednesday, the report said.
US Treasury Secretary Scott Bessent also said a deal to reopen the strait could come this week, further lifting expectations that energy markets may stabilize. Still, hopes for a deal remained muted, with analysts pointing to a recurring cycle of threats and pullbacks in the Middle East conflict.
, the global oil benchmark, were last trading higher, but have fallen sharply so far this week.
The prospect of lower oil prices has prompted traders to dial back expectations for Fed monetary policy tightening. Markets are now fully priced in just one U.S. rate increase by the end of the year, compared with two hikes as recently as last week. Lower rates could burnish gold by decreasing the opportunity cost of holding the non-yielding asset.
also edged lower, making dollar-denominated bullion more attractive for overseas buyers.
Analysts at ING noted that the biggest macroeconomic driver of the week is due to arrive on Friday, when the U.S. jobs report for July will be released. Other data points tracking private payrolls and services sector activity are set to be unveiled on Wednesday.
Gold rallied more than 2% on Wednesday, touching a one-month high, as growing optimism over an interim agreement to reopen the Strait of Hormuz eased inflation concerns and prompted some investors to scale back expectations for further Federal Reserve rate hikes.
At 09:58 ET (13:58 GMT), had jumped 3.1% to $4,203.65 an ounce, while had climbed 2.7% to $4,263.90 an ounce.
On Thursday, the US-Iran conflict reached its 160th day; Iran said the U.S. was ready to “return to commitments,” while denying that negotiations were ongoing with Washington, after President Donald Trump signaled a deal was in the making.
Iran’s Deputy Foreign Minister Kazem Gharibabadi made those comments in an interview with state broadcaster IRNA on Wednesday, without elaborating on the commitments in question, likely referring to the interim understanding reached in June.
Under the memorandum of understanding signed on June 17 between the U.S. and Iran, Tehran was supposed to allow commercial vessels to transit the Strait of Hormuz with no charge for 60 days. In return, Washington had committed to lifting its naval blockade of Iranian ships, among other things.
Trump had accused the Islamic republic’s leaders on Monday stateside of being “duplicitous” about peace talks, saying they were underway “whether Iran wants to admit it or not.”
Gharibadadi said that, “The path of understanding is between Iran and Oman, and no negotiations with the US have taken place during this period.”
But I find that a durable settlement remains elusive, with core disputes over Iran’s nuclear program, the Strait of Hormuz, and sanctions relief unresolved, as despite a Pakistan-mediated ceasefire and June MOU halted large-scale fighting, both sides have since traded strikes over alleged violations.
Undoubtedly, repeated claims by President Trump to resolve this conflict as Iran agreed to make a deal have become a routine phenomenon, and seem only a strategy to earn more and more by providing sudden jolts to global markets by shifting his statements on Iran’s positive response, while Iran has repeatedly denied Trump’s statements.
Now, when the conflict between the US and Iran has reached its 159th day, the global scenario looks precarious enough due to choking of the Strait of Hormuz since the beginning of this war, resulting in disruption of global supply through these important waterways, while the Iran-supported Houthis have blocked the second important Strait, “Bab el- Mandeb.
I observe that this conflict has had deeper scars on global production and extended inflationary pressure beyond limits, and has turned into a major challenge for the global central banks while the denting impact is still intact, and Iran has never shown any interest in opening the Strait of Hormuz, as the Strait has now become an effective part of war strategy for Iran.
Meanwhile, repeated threats from President Trump have raised the confidence of the Iranian people to fight against all odds, at any cost, anytime since the death of Iranian supreme leader Ali Khamenei on February 28, 2026, when the US-Israel jointly started a war on Iran.
However, depleting US military stockpiles have turned into a fresh headache for President Trump, as he is consistently losing his popularity, especially at the time when November mid-term elections are at a short distance.
And, despite his immediate wish to take his head out of this war, which has stuck him in a “Catch-22” position now, only due to the close ally of President Trump, Israeli Prime Minister Netanyahu, who never wants this war to end, as it is equally important for him to maintain his image for upcoming October elections in Israel.
I conclude that currently gold futures are trading in a selling zone amid a temporary shift in sentiment on the reopening of the Strait of Hormuz and surging weakness in the dollar, while the US strategic oil reserves are even below the required minimum levels.
