TLDR
- Gold climbed to $4,255, marking its strongest daily gain since February and a six-week high.
- Progress in US-Iran talks reduced inflation concerns, supporting demand for the precious metal.
- Lower inflation expectations prompted markets to scale back forecasts for additional Fed rate hikes.
- Gold’s market capitalization rose by $1.3 trillion, reaching approximately $30 trillion.
- Investors are closely watching the US July Nonfarm Payrolls report for clues on future Fed policy.
Gold prices climbed sharply on Thursday, reaching around $4,255 per ounce during the Asian session after renewed optimism over US-Iran negotiations reduced inflation concerns and lowered expectations for additional Federal Reserve interest rate increases.
The precious metal recorded its strongest daily gain since February as investors reacted to reports that discussions to reopen the Strait of Hormuz were moving forward. The latest move also pushed gold to its highest level in about six weeks.
Gold Rallies as Strait of Hormuz Talks Progress
Gold extended its gains after Iran said an agreement with Oman on a shipping route through the Strait of Hormuz was being “finalised.” Iranian Foreign Ministry spokesperson Esmaeil Baghaei added that risks from the United States and Israel still remained for vessels operating in the region.
US President Donald Trump also said “a deal could be reached” as diplomatic efforts continued. US Secretary of State Marco Rubio and Treasury Secretary Scott Bessent said negotiations had made progress, adding to expectations that talks could continue.
Lower geopolitical tension weighed on crude oil prices and eased concerns about higher energy costs. Markets responded by reducing expectations for aggressive Federal Reserve policy tightening later this year.
Fed Expectations and Economic Data Remain in Focus
Lower oil prices softened inflation expectations, prompting traders to scale back forecasts for future rate increases. Market pricing now points to fewer expected hikes compared with previous expectations, providing additional support for gold.
Attention has now shifted to the US July employment report due on Friday. Economists expect Nonfarm Payrolls to increase by about 80,000 jobs, while the unemployment rate is forecast to remain at 4.2%.
A stronger-than-expected labor report could support the US dollar and reduce demand for gold. A weaker reading could strengthen expectations that the Federal Reserve will keep monetary policy less restrictive.
The US Dollar Index traded near 99.70 during the session, adding support to dollar-denominated commodities including gold.
Gold Market Value Climbs as Analysts Watch Technical Levels
Gold’s rally lifted its market capitalization by roughly $1.3 trillion to around $30 trillion during the session. The metal has now gained more than 24% over the past year after trading near $3,376 an ounce at the same time in 2025.
Some market analysts have pointed to the latest breakout as an important technical development. Independent analyst EGRAG CRYPTO said gold has broken below its long-term rising channel and outlined two possible paths.
According to the analyst, reclaiming the previous trend and closing above the 21-day exponential moving average could support another advance toward “$4,800.” Failure to recover that level could send prices toward “$3,900” before testing the “$3,455 gap.”
