Key points:

• Gold rises on peace prospects
• Prices hit $4,300 seven-week high
• Real move or bounce for attention?

Four days of gains are fueling hopes for even more gains. Is demand there for real?

🥇 Gold catches a powerful tailwind

• Gold XAUUSD advanced for a fourth consecutive session Thursday, briefly testing $4,300 an ounce and reaching its highest level since June 18.
• Bullion had surged more than 5% Wednesday, its strongest daily performance since February. What a quiet little week for the quiet shiny metal.
• The rally drew support from a softer dollar and falling Treasury yields. A weaker dollar makes gold cheaper for overseas buyers, while lower bond yields reduce the opportunity cost of holding bullion, which pays no interest while sitting magnificently in storage.
• Hopes that the Strait of Hormuz could reopen pushed oil prices lower, easing fears of another inflation surge. Softer inflation would reduce pressure on central banks to raise interest rates, creating a clearer runway for non-yielding assets such as gold.

🕊️ Peace hopes beat safe-haven logic

• The yellow metal has fallen roughly 20% since the US-Iran conflict began in late February. That may seem strange for a traditional wartime safe haven, but surging energy costs raised inflation expectations and interest-rate forecasts.
• Optimism around a diplomatic breakthrough has reversed that equation. Markets now see about a 55% chance of a Federal Reserve rate hike in September, down from 67% two days earlier.
• Less tightening means lower expected returns on cash and bonds, making gold comparatively attractive.
• Still, stop us if you’ve heard this one: Washington and Tehran are close to another agreement. But several previous breakthroughs were followed by renewed strikes.

📊 Friday’s jobs report holds the key

• ADP reported that private employers added only 44,000 jobs in July, down from 95,000 in June and below the 75,000 expected.
• The slowdown weakened the dollar and yields by suggesting the labor market may no longer require additional monetary restraint.
• Friday’s official nonfarm-payrolls report is expected to show roughly 80,000 new jobs, up from 57,000 in June.
• A softer reading could reinforce the gold rally by further reducing rate-hike expectations. A strong surprise could send yields higher and test buyers’ conviction.
• Four consecutive gains prove momentum is present. Whether lasting demand exists depends on gold holding recent breakouts after Friday’s jobs report and through another Middle East plot twist.

Source: Tradingview