Gold advanced toward $4,300 an ounce on Thursday, rising for a fourth consecutive session and gaining nearly 6% so far this week. The move came as an agreement to partially reopen the Strait of Hormuz drove oil prices lower, easing inflation worries and softening expectations for further interest rate hikes. Iran and Oman reached a deal establishing a shipping corridor through the strait, bolstering hopes for increased energy shipments from the Middle East.
In response, markets scaled back their outlook for Federal Reserve tightening this year, now pricing in just one additional rate increase by year-end, down from two as recently as last week. At the same time, ADP data showed the US economy added only 44,000 private-sector jobs in July—its weakest performance since January and well below the 70,000 jobs economists had forecast.
Separately, Fed Governor Lisa Cook reiterated on Wednesday that she remains ready to support further rate hikes if inflation does not continue to moderate, cautioning that the central bank may not have the luxury of waiting to bring inflation back to its 2% target.
