Gold - Peace Talks Should Hurt Gold, So Why Is It Rising?

Gold trades around $4,170 today, up about $100 in one session. This is its highest level in weeks. For the past month, the price stayed in a narrow range between $4,000 and $4,100. Today that range broke.

Here's the strange part. The US, Iran, and Oman are close to a deal to reopen the Strait of Hormuz. Treasury Secretary Scott Bessent said an agreement could come as early as today. Peace news like this usually pushes gold down, not up, because in calmer times fewer investors need gold as a safe place for their money.

So why is gold rising? Follow the chain, step by step. A Hormuz deal means oil moves freely again, so oil prices fall. Cheaper fuel makes almost everything cheaper to produce and transport, so inflation cools. And when inflation cools, the Fed has less reason to raise interest rates. That last step is the key for gold: gold pays no interest, so it always wins a little when rate expectations fall. Right now, this chain matters more to traders than the peace news itself.

But the Fed isn't convinced yet. Markets still see roughly a 63% chance of a rate hike in September, and three Fed officials keep arguing for higher rates.

That's why Friday is the real test. The US jobs report is expected to show about 83,000 new jobs. A strong number would bring the rate-hike fear back and pressure gold. A weak number would support it.

Gold key levels: 

• Resistance: 4,180, then 4,250 
• Support: 4,100, then 4,000 

Watching: today's expected Hormuz announcement, Friday's US jobs report, oil prices as the inflation driver.

By Born2trade market research department

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