Gold prices erase most of yesterday's losses and regain the level of 4,500 dollars per ounce

Gold prices regained most of the losses from the previous session during early trading on Tuesday, achieving a strong increase of over 1% to break the $4,500 per ounce level once again.

The rise in gold prices came amid improving discussions between the United States and Iran regarding ending the conflict in the Middle East and the ceasefire in Lebanon, after the Israeli entity and Hezbollah exchanged military attacks yesterday.

However, U.S. President Donald Trump stated that he had communicated with both parties to contain the escalation that could hinder ongoing negotiations, confirming that both sides stopped exchanging fire following those communications. He also mentioned that he is close to reaching an agreement with Iran and potentially reopening the Strait of Hormuz within a week.

Additionally, Trump expressed his preference for diplomatic efforts to achieve a peace agreement with Iran, which could be even better than a military victory, emphasizing the continuation of diplomatic efforts to reach a settlement for the crisis.

As a result of these developments, gold prices showed a noticeable increase in today’s trading, as investor concerns about rising inflation pressures from the closure of the Strait of Hormuz and the consequent increase in energy prices diminished. This could push global central banks towards tightening monetary policy, which in turn led to the rise in gold prices.

Moreover, the weakness of the U.S. dollar contributed to the bullish momentum in gold prices, with bets on the Federal Reserve tightening monetary policy and raising interest rates at some point during the year declining. This, in turn, boosted gold prices in today’s trading.

Gold Price Movements

In today’s trading, spot gold prices rose by nearly 1.12% to reach $4,534.66 per ounce, while at the same time, prices for gold futures - due for August delivery - increased by about 1.27% to record $4,563.50 per ounce.