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Gold rises as Hormuz reopening hopes weaken the US dollar
XAU/USD traded around $4,087 after slipping to about $4,042, while expectations for a September Fed rate hike fell to 57.1% from 67.2%, according to CME FedWatch.
Gold gained a fresh bid on Tuesday as traders reacted to encouraging but not yet confirmed headlines about the possible reopening of the Strait of Hormuz, lifting XAU/USD to around $4,087 after an intraday low near $4,042, according to FXStreet.
The improved risk tone weighed on the US dollar and oil, with West Texas Intermediate falling toward $75.50, its lowest level in three weeks. FXStreet said lower oil can ease inflation pressures, which in turn reduces pressure on the Federal Reserve to raise rates, helping support gold.
The currency move was reinforced by lower Treasury yields, FXStreet added. CME FedWatch showed the probability of a September rate hike falling to 57.1% from 67.2% a day earlier, a backdrop that typically supports non-yielding assets like gold.
Traders were also monitoring US data for fresh guidance, with JOLTS job openings reported at 7.359 million in June, down from 7.594 million and slightly below the 7.4 million expected. FXStreet said market focus then shifts to ADP Employment Change and Nonfarm Payrolls later in the week, while noting uncertainty remains until Tehran confirms either direct talks with Washington or an agreement to reopen the strait.
Latest closeGold $4,133.60 ▲2.5%