Gold prices climbed on Wednesday, with spot gold reaching $4,285.84 per ounce, its highest level since June 18, as optimism grew over a potential diplomatic breakthrough in the five-month US-Iran conflict.
Iran announced it had reached a preliminary agreement with Oman on a temporary shipping route through the Strait of Hormuz, with negotiations ongoing over a two- to four-month corridor running largely through Iranian waters. IG analyst Tony Sycamore said gold's strong rebound reflected growing market optimism that a Middle East diplomatic resolution may be near. Spot gold earlier traded at $4,058.99 on Tuesday before accelerating higher.
Silver, platinum, and palladium also posted gains. Market expectations for a September Federal Reserve rate hike cooled, with implied probability falling to 55% from 67% two days prior, while New York Fed President John Williams said policymakers remain willing to raise rates if inflation persists. The US nonfarm payrolls report is due Friday.