Gold hits highest since June on weak payrolls and Hormuz deal hopes

• Weak ADP jobs report reduces likelihood of a Fed rate hike in September, benefiting non-yielding gold as lower rates make the metal more attractive
• Joint U.S.-Japan currency intervention weakened the dollar to 6-week lows around 99.78, with gold trading inversely to the greenback during the ongoing conflict
• Iran indicated a deal with Oman to reopen the Strait of Hormuz is close, easing geopolitical tensions and supporting risk assets including gold

Summary

Gold Rallies to Seven-Week High on Economic and Geopolitical Developments

Gold prices surged to their highest level since late June, reaching $4,295 per ounce before settling around $4,268 per ounce on Thursday. Gold futures traded at $4,329 per ounce, marking the precious metal's fourth consecutive winning session.

Key Drivers:

The rally was fueled by weaker-than-expected U.S. employment data and easing Middle East tensions. July's ADP private payroll report showed significant hiring slowdowns, with most growth concentrated in healthcare. This weak data reduces the likelihood of a Federal Reserve rate hike in September—a positive development for non-yielding gold.

A weaker U.S. dollar also supported prices, with the dollar index hovering near six-week lows at 99.78. This followed joint U.S.-Japan currency intervention, with Tokyo reportedly selling nearly $60 billion in Treasuries to support the yen. Gold has traded inversely to both the dollar and oil prices throughout the ongoing conflict period.

Additionally, potential progress on reopening the Strait of Hormuz provided relief to risk assets. Iran indicated Wednesday that a deal with Oman to reopen the critical waterway is near completion, easing geopolitical concerns.

Market Context:

Despite the recent bounce, gold remains approximately 20% below its all-time high of $5,589 per ounce reached in late January 2026. The precious metal has faced significant headwinds over the past six months following a strong rally that extended through 2025.

Implications:

The combination of dovish Fed signals and reduced geopolitical risk could provide continued support for gold prices, though substantial recovery to previous highs remains uncertain.