Gold hits seven-week peak amid Hormuz focus

Gold rose for a fourth session on Thursday and touched its highest level in seven weeks, helped by a softer dollar, while market participants assessed the chances of the Strait of Hormuz reopening.
Spot gold was up 0.2% at $4,254.98 per ounce by 0636 GMT, after earlier hitting its highest level since June 18. On Wednesday, bullion posted its biggest daily gain since February.
'The sharp rally came on building optimism that a diplomatic breakthrough in the ⁠Middle East is close to being finalised. This in turn would keep downside pressure on oil prices and reduce the need for central banks to raise rates, providing a clear tailwind for gold,' IG market analyst Tony Sycamore said.
A sustained break above the 200-day moving average could pave the way for a stronger recovery toward the $5,000 mark, he added.
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.
Spot gold has declined ⁠19% since the onset of the U.S.-Iran conflict on February 28, due to fears of energy-driven inflation pushing interest rates higher. Gold tends to perform better in a low interest-rate environment as it yields no interest.
Market expectations for a September U.S. rate hike have eased to 55% from 67% two days earlier.
Among other ⁠metals, spot silver fell 0.5% to $61.78, platinum was up 0.8% to $1,755.18 after hitting its highest since June. ـــReuters