FX.co ★ Gold Rises in Iran Deal Hopes

Gold rose toward $4,600 an ounce on Monday, recovering the losses recorded last week as growing optimism over a potential US-Iran agreement eased concerns about inflation and further interest rate hikes. Reports suggested that the proposed accord could reopen the Strait of Hormuz, end ongoing hostilities, unlock a portion of Iran’s frozen assets, and establish a framework for further talks aimed at curbing Tehran’s nuclear program. Even so, President Donald Trump stated that the US would maintain its blockade of the Strait of Hormuz until a formal deal is concluded. Despite Monday’s rebound, gold is still trading about 13% below its level at the onset of the Middle East conflict, as fears of an energy-driven inflation shock have reinforced expectations that central banks may need to keep monetary policy tight. Investors also continued to weigh the outlook for Federal Reserve policy after Governor Christopher Waller indicated he no longer believed the central bank should preserve an easing bias in its policy statement.