Gold Narrows Range as Hormuz Deal Cuts Fed Hike Expectations

Spot gold trades flat amid Strait of Hormuz progress, which eases inflation fears and slashes Fed rate hike expectations from two to one this year.

Woofun AI reports that spot gold traded within a narrow range during Wednesday's Asian session, driven by optimism over a potential temporary agreement regarding the Strait of Hormuz. Qatar has drafted a proposal to normalize commercial shipping through the waterway, with U.S. and Iranian officials indicating progress in negotiations to reopen the critical energy route.

This diplomatic development has eased inflation concerns, causing oil prices to fall for a third consecutive day. Consequently, market pricing for Federal Reserve rate hikes has shifted sharply, now reflecting just one hike this year compared to nearly two last week. Nicky Shiels, Head of Research and Metals Strategy at MKS Pamp, stated: "Gold is the liquidity sponge in the commodities macro space, and it is one of the first assets to be hit whenever any tightening risk signals emerge—whether structural or news-driven."