Gold Rises a Third Straight Day to Two-Week Highs as a Hormuz Deal — or “Decapitation” — Nears

Gold has climbed for a third consecutive session this Wednesday August 5, trading between roughly $4,095 and $4,166 per ounce and touching its strongest levels in about two weeks. The advance is being powered by a rare alignment: interest rate expectations are falling in gold’s favour at the very moment the US-Iran standoff approaches its most dramatic decision point yet. With Washington saying a deal to reopen the Strait of Hormuz could come “today or tomorrow” — and President Trump threatening “decapitation” if it does not — this is a day of extraordinary stakes.

Start with the quieter driver, because it may matter most. Market expectations for a September Federal Reserve rate hike have tumbled to about 57%, down from 67% just a day earlier — and from roughly 81% before last week’s Fed meeting. This steady collapse in hike expectations is deeply supportive for gold, which pays no yield and suffers when rates rise. The shift reflects cooling inflation data, last week’s soft economic growth reading, and the prospect that a reopened Hormuz would send oil — in Trump’s own words — “through the floor.” Adding to the support, gold-backed exchange-traded funds in China continue to attract inflows, with institutional investors consistently defending the $4,000 level.

Now the louder driver. President Trump has declared the current talks Iran’s “last chance before decapitation,” branding Tehran’s leadership “unbelievably duplicitous” for publicly denying that negotiations exist, and warning that Iran’s bridges would be “decimated by 12:00 tomorrow night” without an agreement. Yet alongside the threats, his administration signals genuine progress: Treasury Secretary Scott Bessent told CNBC “we are in talks with the Iranians” and said a deal to reopen the Strait of Hormuz could be reached “today or tomorrow,” while Secretary of State Rubio confirmed progress in the Hormuz discussions. Trump himself projected the strait could reopen “literally by tomorrow” as phase one of an agreement, with denuclearization to follow as phase two. Oil prices whipsawed on the conflicting signals — rising when traders doubted diplomacy, then tumbling on Bessent’s optimism — and the Dow hit an all-time high.

Iran’s position remains starkly different, and honesty requires stating it. Foreign Ministry spokesman Esmail Baghaei insists Tehran is negotiating only with Oman, and that their corridor agreement — a single, temporary shipping route — “has no connection to whether the Strait of Hormuz is open or closed.” He said no significant change should be expected while the US naval blockade of Iran remains in place; that blockade has now redirected 44 commercial vessels, disabled two, and boarded two more. US officials, meanwhile, report Iran’s leadership is internally divided over whether to end the war. The gap between Washington’s optimism and Tehran’s defiance is the risk hanging over the next 48 hours.

For gold, the current setup is unusually favourable, which explains three straight green days: the rate channel (falling hike odds) and the safe-haven channel (deadline risk) are both pushing the metal up simultaneously. A genuine deal would extend the dovish rate story; a collapse into massive strikes would ignite the safe-haven bid. Traders should note Friday’s July jobs report remains the week’s other pivotal event — ADP private payrolls land today, jobless claims tomorrow.

For buyers, gold near $4,130 is about 26% below January’s record of $5,597 and up roughly 21.6% over the past year. The structural floor holds: central banks bought a net 41 tonnes in May and 244 tonnes in the first quarter, with 89% of reserve managers expecting official holdings to keep rising.

Today’s prices: 24K — $132.80/gram | 22K — $121.75/gram | 21K — $116.20/gram

All prices USD. Wednesday August 5 indicative. Highly volatile — major decisions imminent. Confirm in store before purchase.