Gold Rebounds as Fed Rate-Hike Odds Fall to 55%, Can It Reach $5,000?

• Spot gold rose 0.2% to $4,254.98 an ounce, its highest since June 18, after posting its biggest one-day gain since February. 
• The rebound follows a 19% decline triggered by the February 28 US-Iran conflict, when higher inflation expectations pushed markets toward a higher-for-longer Fed outlook. 
• September Fed rate-hike odds have since fallen to 55% from 67%, while the dollar index remained near a six-week low of 99.76, reducing the opportunity cost of holding gold and supporting renewed buying. 
• A sustained break above gold's 200-day moving average could support a move toward $5,000, according to IG's Tony Sycamore, although stronger-than-expected July payrolls could strengthen the dollar and delay that breakout. 
• With both the payrolls report and the Iran-Oman Hormuz proposal still unresolved, the evidence favors sizing positions around the underlying macro trend rather than attempting to time binary event outcomes.

Six-Week-Low Dollar Supports Gold's Four-Day Rally Across Precious Metals

Spot gold rose 0.2% to $4,254.98 an ounce, its highest since June 18, after its biggest one-day gain since February. US gold futures also gained 0.2% to $4,312.80, reinforcing the move across both spot and futures markets. Gold has now advanced for four consecutive sessions as the dollar index remained near a six-week low of 99.76, reducing the opportunity cost of holding bullion. 

Platinum climbed 0.8% to $1,755.18, its highest since June, while palladium added 0.8% for a third straight session to $1,748.08, showing the recovery extends across the precious-metals complex. Broad participation across all three metals suggests the rebound is being driven by improving macro conditions rather than short-term sentiment, a combination that can create opportunities before broader market positioning adjusts.

Lower Fed Rate-Hike Odds Lift Gold Despite Unresolved Hormuz Risks

Gold's 19% decline since February 28 followed fears that a wider US-Iran conflict would disrupt Hormuz energy shipments, lift inflation expectations, and keep Fed rates higher for longer. Because gold pays no yield, rising rate expectations increased the appeal of interest-bearing assets and weighed on bullion. That pressure began to ease as September Fed rate-hike odds fell to 55% from 67%, lowering the opportunity cost of holding gold. Markets responded to reports of a proposed Iran-Oman agreement that could reduce disruption risks around the Strait of Hormuz, although US officials have not confirmed the proposal and continue to reject Iranian control of the route. 

The gap between improving market expectations and unresolved diplomacy suggests sentiment has turned before the underlying geopolitical risks are fully resolved, a setup that often rewards evidence-led positioning over waiting for complete certainty.

Supply-Chain Formalization Reinforces Gold's Long-Term Outlook Ahead of the Fed Decision

US officials have not confirmed the Hormuz proposal, leaving geopolitical risks unresolved despite gold's recovery. A sustained break above gold's 200-day moving average could support a move toward $5,000, according to IG's Tony Sycamore. Separately, the World Gold Council and OCIM Metals and Mining SA agreed to formalize artisanal and small-scale gold mining, a sector supporting more than 20 million livelihoods worldwide. OCIM's Peru subsidiary, Soleil Metals, has onboarded more than 200 mining partners and is targeting 1,000 kg of gold production by the end of 2026. World Gold Council Chief Executive Officer David Tait said formalization can strengthen supply-chain standards and confidence in gold sourcing.

Bear case: payrolls above 80,000 strengthen the dollar and delay that breakout. The key indicators remain Friday's payrolls report and gold's performance relative to its 200-day moving average.

Bull case: payrolls below 80,000 and a confirmed Hormuz de-escalation would push rate-hike odds and the dollar lower, reducing gold's opportunity cost and strengthening the case for a break above the 200-day moving average toward $5,000.

Lower Rate Expectations Reverse Gold's Five-Month Decline as Precious Metals Strengthen

Gold's 19% decline after the February 28 conflict reflected higher rate expectations that reduced demand for non-yielding assets. The trend has begun to reverse, with gold rising for four straight sessions while platinum and palladium each gained 0.8%, signaling broader strength across precious metals. September Fed rate-hike odds have fallen to 55% from 67%, reducing the opportunity cost of holding gold. 

Joshua Rotbart, founder of J. Rotbart & Co, said weaker-than-expected July payrolls would support gold, while a stronger reading could strengthen the dollar and weigh on prices. Payrolls and developments around Hormuz remain the key catalysts.

Watch Friday's Payrolls: 80,000 Payroll Threshold Could Decide Gold's Breakout Watch Friday's Payrolls

Gold's rally has been supported by a six-week-low dollar index and September Fed rate-hike odds falling to 55% from 67%, reducing the opportunity cost of holding gold. The same conditions lifted platinum 0.8% and extended palladium's rally for a third straight session. 

Payrolls above the 80,000-job consensus or a US rejection of the Iran-Oman Hormuz proposal could strengthen the dollar and delay gold's move toward $5,000, according to IG's Tony Sycamore. Friday's payrolls report and gold's position relative to its 200-day moving average are the key signals to watch.