Gold advances to one-month high as Hormuz reopening hopes ease inflation fears
Gold (XAU/USD) climbs to a one-month high on Wednesday as renewed optimism over the reopening of the Strait of Hormuz sends Oil prices lower. At the time of writing, XAU/USD trades around $4,155, up nearly 1.90% on the day.
Gold (XAU/USD) surges past 3.5% on Wednesday as US labor market data fell short of forecasts, easing inflation worries and reducing expectations for Federal Reserve interest rate hikes. XAU/USD is currently trading around $4,230, marking its highest level since June 18. The US Dollar Index (DXY) stands at 99.70. ADP Employment Change rose by 44K in July, below expectations of 70K, and slower than June's 98K.
Traders now await Friday's Nonfarm Payrolls (NFP) report for more insight into the US labor market. ISM Services PMI edged to 54.1 in July from 54 in June but missed the 54.5 forecast. ING strategists note that lower energy prices have eased inflation concerns, supporting gold's bullish trend despite ongoing uncertainty over US interest rates.
A September Fed rate hike is now considered less likely, with the CME FedWatch Tool probability dropping to 56.9% from 67.2%. President Trump claimed positive talks with Iran and Oman regarding the Strait of Hormuz, which could reopen soon. XAU/USD has reclaimed the 21-day and 50-day SMAs, breaking above $4,200, strengthening the near-term bullish bias.
A daily close above $4,200 would push the price towards the 100-day SMA near $4,398. Conversely, a break below $4,000 would signal a deeper correction.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
