Gold hits one-month high on ice hopes and weak Dollar

Gold prices rose in early Wednesday trading, touching a one-month high as European markets opened. Traders remain optimistic that the United States and Iran could reach a peace agreement that would allow the Strait of Hormuz to reopen. This optimism, reflected in lower oil prices, has also prompted investors to scale back expectations that the Federal Reserve will raise interest rates before the end of the year. As a result, the US dollar weakened against most major currencies, benefiting gold due to the inverse relationship between the two assets. Against this backdrop, investors will continue to monitor developments in the Persian Gulf while also turning their attention to this week's US labour market data, culminating in Friday's all-important Non-Farm Payrolls report. Employment figures pointing to a resilient US economy would strengthen the case for tighter monetary policy, supporting the dollar and likely weighing on gold prices. Conversely, weaker-than-expected data would reduce expectations of further interest rate hikes, potentially triggering renewed dollar weakness and providing additional support for the precious metal.