Gold at 7-week high... amid hopes of reopening of the Strait of Hormuz

Gold prices rose on Thursday for a fourth consecutive session, reaching their highest level in seven weeks, supported by a decline in the US dollar and lower Treasury yields, amid growing hopes of reaching an agreement that could help reopen the Strait of Hormuz.

By 00:35 GMT, spot gold rose 1 percent to $4,285.69 per ounce, its highest level since June 18, after posting its largest daily gain since February in the previous session. US gold futures also rose 0.9 percent to $4,345.50 per ounce.

The gains coincided with a drop in yields on 10-year US Treasury bonds and continued pressure on the US Dollar Index, enhancing gold’s appeal to holders of other currencies.

In a related development, a senior Iranian source and two regional officials told Reuters that a proposed agreement between Iran and the Sultanate of Oman to help end the five-month war between Iran and the United States could grant Tehran control over ships transiting the Strait of Hormuz, a move that could represent one of the largest concessions offered to Iran so far.

Optimism about the potential end of the conflict led markets to lower expectations for a US interest rate hike in September, with the probability of a hike falling to 55 percent from 67 percent two days ago.

On the other hand, US Federal Reserve Board member Lisa Cook said she is open to raising the target short-term interest rate to address inflation levels she described as “very high” in the US economy.

Investors are awaiting the release of the US non-farm payrolls report for July on Friday, following a report from ADP showing a slowdown in private sector job growth in the US, with 44,000 jobs added in July, compared to a revised increase of 95,000 in June.

For other precious metals, spot silver rose 0.4 percent to $62.34 per ounce, platinum gained 0.8 percent to $1,750.15, and palladium rose 1 percent to $1,377 per ounce.