Gold touches seven-week high on Strait of Hormuz reopening hopes
GLD•Gold rises to seven-week high
Aug. 6 (Reuters) - Gold rose for a fourth straight session on Thursday and touched its highest level in seven weeks, helped by a softer dollar and lower Treasury yields on growing hopes over the Strait of Hormuz reopening.
- Spot gold XAU= was up 1% at $4,285.69 per ounce, as of 0035 GMT, hitting its highest level since June 18. On Wednesday, bullion posted its biggest daily gain since February.
- U.S. gold futures GCcv1 rose 0.9% to $4,345.50.
- The yield on benchmark U.S. 10-year notes fell and the U.S. dollar index =USD was also under pressure. A weaker U.S. currency makes dollar-priced commodities cheaper for other currency holders. US/ USD/
- A proposed deal between Iran and Oman to help end five months of war between Iran and the United States would give Tehran control over ships entering the Gulf through the Strait of Hormuz, a senior Iranian source and two regional officials told Reuters, one of the biggest concessions yet to Iran.
- Growing Iran optimism has seen market expectations for a September U.S. rate hike ease to 55% from 67% two days earlier. FEDWATCH
- Gold tends to perform better in a low interest-rate environment as it yields no interest.
- Federal Reserve Governor Lisa Cook said she is open to the idea that the central bank may need to raise its short-term interest rate target to deal with “too high” levels of inflation in the U.S. economy.
- Investors are also awaiting the July U.S. nonfarm payrolls report scheduled for release on Friday.
- The ADP national employment report showed on Wednesday that U.S. private payrolls growth slowed in July. Private employment increased by 44,000 jobs last month after a downwardly revised 95,000 gain in June.
