Gold prices recorded their strongest daily gain since February on Wednesday, 5 August 2026, supported by a weaker US dollar, lower Treasury yields and growing optimism that diplomatic negotiations could lead to the reopening of the Strait of Hormuz.
On 5th August 2026, US gold futures advanced around 3.67% to US$4,305.2 per ounce. Bullion subsequently extended its rally during Asian trading on Thursday, reaching its highest level in seven weeks. At the time of writing, Gold futures are trading at around US$4,356.2 per ounce
Gold Futures (Source: TradingView)
Market sentiment improved following indications of progress in discussions involving the United States, Iran and Oman. US President Donald Trump suggested that further clarity on a possible agreement could emerge within 48 hours. However, negotiations remain ongoing, and a final agreement to reopen the strategically important waterway has not yet been announced.
A potential reopening of the Strait of Hormuz could reduce concerns about disruptions to global energy supplies. Lower oil prices may ease inflationary pressures and reduce the need for the US Federal Reserve to raise interest rates aggressively. This environment generally supports gold because lower interest rates reduce the opportunity cost of holding non-yielding assets.
The US dollar also weakened to a seven-week low, making dollar-denominated gold relatively more affordable for buyers using other currencies.
Economic data provided additional support. US private-sector employment increased by only 44,000 positions in July, slowing from a revised 95,000 increase in June. The result indicated a moderation in hiring ahead of the official US nonfarm payrolls report.
Meanwhile, the US ISM Services PMI edged up to 54.1 in July from 54.0 in June, indicating continued expansion. However, the employment index declined to 47.4, while the prices-paid index increased to 70.3, highlighting a mixed outlook of resilient activity, weaker employment and persistent input-cost pressures.
For Australian investors, movements in the Australian dollar will influence the domestic gold price. The rally may also improve sentiment towards ASX-listed gold producers and developers, although company-specific production, costs, balance-sheet strength and operational performance remain important considerations.
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