After five days of gains, gold prices have consolidated as investors shift focus to the Federal Reserve’s interest rate path ahead of this week’s annual Jackson Hole meeting.
Gold eased slightly to around $4,650 per ounce, down from a three-month high hit in the previous session. However, it still rose about 7% last week, driven by unexpected intervention by the U.S. Treasury in the bond market.
Recent efforts to control U.S. debt costs have reignited interest in so-called “currency devaluation trades,” which previously fueled gold’s record-breaking rally last year as investors bought precious metals to hedge against sovereign debt and currency risks amid out-of-control budget deficits.
New diplomatic developments in the Middle East have also eased long-term inflation concerns.
According to a joint statement released by Oman’s official news agency, Iranian Foreign Minister Abbas Araghchi and Omani Foreign Minister Badr Al Busaidi discussed an “interim framework” aimed at restoring shipping through the Strait of Hormuz, with both sides continuing long-term talks on navigation through this vital waterway.
The statement said the initiative seeks to establish a “temporary joint maritime corridor” and launch mine-clearing operations to restore safe passage in the region.
It added that technical discussions will continue with the goal of reaching agreement on a permanent maritime corridor, future management of the strait, and mechanisms for information sharing, traffic management, and provision of related maritime and security services.
Iran’s semi-official Tasnim news agency reported that Deputy Foreign Minister Kazem Gharibabadi said Iran and Oman would hold further talks to “open a new permanent route for shipping through this critical waterway within 30 to 60 days,” though no specific timeline was given for the next phase of negotiations.
Tehran has previously stated it is focusing solely on talks with Oman, another coastal state in the Strait of Hormuz, and insists these discussions are unrelated to the stalled negotiations with Washington.
Tehran says the key to restarting talks hinges on whether Washington complies with the terms of the agreement. Iran accuses the U.S. of encouraging ships to use alternative routes, undermining its control over the Strait of Hormuz and violating the deal. The White House counters that Iran’s attacks on commercial and cargo vessels in the Strait violate the agreement and blames Tehran for failing to effectively control rogue elements within its military.
In a report, TD Securities analysts Ryan McKay and Bart Melek wrote: “Precious metals are seeking support in higher ground,” noting limited upside potential in the short term due to elevated energy prices and persistent inflation risks. They added: “We caution that this rebound may be premature and insufficient to push prices back toward historical highs.”
