Gold prices (XAU/USD) climbed to nearly $4,255 during the early Asian session on Thursday, marking the largest daily jump since February, driven by optimism surrounding a potential deal to reopen the Strait of Hormuz between the US and Iran [1]. Iran’s Foreign Ministry spokesperson Esmaeil Baghaei stated that a deal with Oman on a route through the Strait is being 'finalised,' though he cautioned that US and Israeli threats to shipping remain [1]. US President Donald Trump expressed that a deal could be reached on Wednesday, with US Secretary of State Marco Rubio and Treasury Secretary Scott Bessent both confirming progress in diplomatic talks [1].
The prospect of an interim agreement to clear and reopen the critical waterway has eased energy-driven inflation fears, reducing expectations for aggressive Federal Reserve interest rate hikes and supporting gold prices in the near term [1]. Analysts at Commerzbank noted that falling US Treasury yields, prompted by lower oil prices, have reinforced gold’s recovery and contributed to a broader risk-on tone in markets [1].
Technical analysis shows XAU/USD has moved above the 20-day simple moving average (SMA) component of the Bollinger Bands, shifting the near-term outlook to neutral with a slight bullish tilt. However, gains remain capped below the 100-day SMA resistance at around $4,400. The Relative Strength Index (14) stands at 60.95, indicating firm but not overextended upside momentum [1]. Immediate support is seen at the reclaimed Bollinger upper band near $4,185, with further support at the 20-day SMA region around $4,070 [1].
Traders are also awaiting the US July employment report, due Friday, which could influence the US dollar and gold prices. Economists expect Nonfarm Payrolls to rise by 80,000 and the Unemployment Rate to remain steady at 4.2%. Stronger-than-expected results could strengthen the dollar and weigh on gold [1].
CONCLUSION
Gold’s rally above $4,250 is fueled by optimism over a potential US-Iran deal and easing inflation concerns, with technical indicators suggesting further upside if resistance levels are breached. Market participants are closely watching upcoming US employment data, which could impact gold’s trajectory depending on the dollar’s response. Overall, the event has had a high market impact, with sentiment leaning positive for gold in the near term.