Gold Surges To One-month Peak As Inflation Concerns Ease

(RTTNews) - Gold prices surged 2 percent to hit a one-month high on Wednesday as a sharp fall in oil prices helped ease concerns around inflation and interest rates.

Spot gold jumped 2 percent to $4,157.25 an ounce while U.S. gold futures were up 1.5 percent at $4,216.22.

Brent crude futures held steady around $80 per barrel but were down more than 9 percent so far this week amid rising optimism over a potential interim agreement to reopen the Strait of Hormuz.

Media reports suggest that Iran is considering allowing European countries to help clear mines from the strategic waterway, marking a significant shift in Tehran's position.

Iranian Foreign Ministry spokesman Esmaeil Baqaei said that talks with Oman on securing safe shipping routes continue "positively."

Saudi Arabia reportedly said it intends to contain a renewed conflict with Houthi militants through behind-the-scenes diplomacy.

The pullback in oil prices amid hopes for a potential de-escalation of the U.S.-Iran conflict reduced the pressure on global bond yields, with 10-year U.S. Treasury yields falling to 4.6187 percent from last week's high of 4.747 percent.

The U.S. dollar hovered near a six-week low as traders scaled back their expectations for a September interest rate hike by the U.S. Federal Reserve.

During a speech on Tuesday, Fed Bank of Kansas City President Jeff Schmid said that current inflation remains "too high" and there is a need for tighter policy to ensure price increases decline to the central bank's 2 percent target.

The U.S. jobs report due this week may offer additional clues on the Federal Reserve's policy path.