Gold prices in the global market have recorded a rise for the fifth consecutive session, largely due to growing hopes for a possible peace deal between the US and Iran and weakening expectations of a US interest rate hike.
Spot gold prices rose 0.3 percent on Wednesday to $4,341.12 an ounce, while US gold futures for August delivery rose 0.2 percent to $4,361.10 an ounce. According to US President Donald Trump, the interim agreement under consideration between the US and Iran will help prevent Tehran from acquiring nuclear weapons. A US official said that Iran may also be allowed to export oil after progress on the deal.
Meanwhile, after the news of the agreement, crude oil prices in the global market remained near their lowest level in almost three months, which raised expectations of a decrease in inflationary pressures. This situation has weakened expectations of further interest rate hikes, which have been supportive for gold prices.
According to analyst Ilya Spivak, the decline in oil prices has reduced the pressure of monetary tightening, but the recent rise in gold prices now appears to be slowing as investors focus on the upcoming policy decision of the US Federal Reserve. On the other hand, investors are awaiting the results of the Federal Reserve meeting scheduled for today, where interest rates are expected to be maintained at the current level.
According to the CME FedWatch tool, the probability of a US interest rate hike in December has decreased to 59%, which was about 70% last week. According to experts, the interest rate decision and global geopolitical conditions will determine the trend of gold prices in the coming days.
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