Gold prices continued to strengthen as XAU/USD surged to a one-week high above $4,700 amid potential easing of the conflict in the Strait of Hormuz.
As of 10 am this morning, gold prices were trading at $4,704 an ounce, up about 0.30% since it opened early Thursday in Asian trading.
The rise in gold prices was driven by positive market sentiment after reports that the United States and Iran were discussing new proposals to end the war conflict that has been weighing on global energy markets.
According to a Bloomberg report, Donald Trump believes the war has a good chance of ending and is likely to achieve positive developments before his visit to Beijing next week.
Hopes for a resolution to the conflict helped ease global inflation concerns following the previous rise in energy prices. The situation also raised expectations that the Fed may be more inclined to cut interest rates than maintain tight monetary policy for a long time.
A drop in interest rates usually provides a surge in support for safe-haven assets like gold.
Market analysts' high optimism over the potential for a US-Iran peace deal has provided some short-term relief to the gold market.
However, he cautioned that the market remains sensitive to geopolitical developments in the Middle East and gold prices can fluctuate rapidly depending on headlines related to the conflict.
