Gold prices extended their biggest gain in six months as signs of the reopening of the Strait of Hormuz eased pressure on energy markets from expected Federal Reserve rate hikes.
Gold prices surged 1.3%, briefly surpassing $4,300 per ounce, after rising 4.1% in the previous trading session—the largest gain since February 3. Iran said it has reached an agreement with Oman on a proposed shipping route through the Strait of Hormuz, increasing the likelihood that some energy shipments could resume via this vital waterway. Oil prices fell.
Iran’s Deputy Foreign Minister Kazem Gharibabadi told domestic media that the route would be temporary and last “two to four months,” adding that “this understanding does not mean a full reopening of the strait.”
According to Iranian Foreign Ministry spokesperson Ismail Baqai, who posted on Telegram on Wednesday, the joint statement between Tehran and Muscat is currently under review and in the final drafting stage. He told reporters that negotiations between the two countries “are making progress,” and an agreement will be reached if “certain third parties do not obstruct this process.”
Iran and Oman have held several days of talks on a management plan for the Strait of Hormuz, which has become the focal point of U.S.-Iran tensions. Bagheri did not mention any role played by Washington, merely stating that the closure of the strait was a result of attacks by the United States and Israel.
The White House did not respond to a request for comment. President Donald Trump said Tuesday evening that an agreement on the Strait of Hormuz was imminent. He has previously claimed several diplomatic breakthroughs, but none have resulted in lasting agreements.
Ryan McKay, an analyst at DTC Securities, and others wrote in a report: “The gradual easing of macroeconomic headwinds, combined with hopes for a U.S.-Iran deal, has provided strong momentum to precious metal prices.” They added: “Since June, the holdings of macro-driven independent funds have more than doubled,” supported by top-tier funds on the Shanghai Futures Exchange and inflows into Asian gold ETFs.
China’s gold ETF has seen inflows for 14 consecutive trading days, setting a record for the longest winning streak since March. This indicates a shift in market sentiment in the world’s largest gold market, following prolonged capital outflows and falling gold prices triggered by Middle East unrest.
“Interest from institutional investors has increased since gold prices fell to around $4,000 per ounce,” said Mr. Zhou, an analyst at Huatai Fund Management Co., Ltd., which operates China’s largest gold ETF. He noted that the sell-off in China’s stock market has also driven capital inflows.
