Gold prices rise on easing Middle East tensions

Gold prices rose for a fourth consecutive day on Thursday, reaching their highest level in seven weeks amid growing optimism that the Strait of Hormuz could reopen, AzerNEWS reports.

According to a Reuters report, spot gold gained 1% to $4,285.69 per ounce, marking its highest level since June 18.

U.S. gold futures also climbed 0.9% to $4,345.50 per ounce. The rally was further supported by a weaker U.S. dollar and lower U.S. Treasury yields.

In addition, market sentiment improved following reports of a potential Iran-Oman agreement that could help ease the five-month conflict between Iran and the United States and restore shipping through the Strait of Hormuz.

Spot gold has declined 19% since the onset of the U.S.-Iran conflict on February 28, due to fears of energy-driven inflation prompting higher interest rates. Gold tends to perform better in a low interest-rate environment as it yields no interest.

Growing optimism has seen market expectations for a September U.S. rate hike ease to 55% from 67% two days earlier.