Gold holds near seven-week highs as Hormuz doubts revive risk premium

• XAU/USD trades near $4,260 on Thursday, slightly off $4,304 intraday high.
• WTI trades higher as Tehran cautions that a shipping framework would not automatically reopen the Strait of Hormuz.
• US labor layoffs are down heading into Friday's NFP print.

Gold (XAU/USD) extends Wednesday's 4% spike on Thursday, trading around $4,260 and holding near a seven-week high as a softer US Dollar (USD) and retreating Treasury yields reinforce the metal's recovery. What distinguishes Thursday's session is that Gold is climbing alongside Crude Oil rather than against it.

Iranian Deputy Foreign Minister Kazem Gharibabadi told the Islamic Republic News Agency (IRNA) that the agreement would not automatically reopen the waterway. According to a senior Gulf official, there is a 50% chance that Iran and Oman will reach a deal by Friday. Meanwhile, United States (US) Vice President JD Vance told Fox News that talks with Iran were "messy," calling Iranians "extraordinarily difficult people." Reuters has separately reported that the proposal could hand Tehran control over inbound traffic, a formulation Washington has repeatedly rejected.

Thursday's releases were more mixed, with Initial Jobless Claims at 199K against the 202K consensus and Challenger Job Cuts easing to 33.4K from 45.8K, describing a labor market cooling through slower hiring rather than rising layoffs. Softer employment data have trimmed the odds of a September Federal Reserve (Fed) hike, a straightforward tailwind for a non-yielding asset.

Friday's Nonfarm Payrolls report is the immediate hurdle as a Reuters survey points to an 80K gain in July after June's 57K, with the Unemployment Rate steady at 4.2%.

Technical Analysis:

On the 4-hour chart, XAU/USD trades at $4,253, maintaining a bullish near-term bias as price holds above both the 20-period Simple Moving Average (SMA) at $4,146 and the 100-period SMA at $4,073. The cluster of horizontal supports at $4,248 and $4,232 sits just beneath the market, reinforcing the constructive structure, while the Relative Strength Index (RSI) at 72 signals overbought conditions that could temper immediate upside momentum.

On the topside, initial resistance appears at $4,276, ahead of a stronger barrier at $4,304, where fresh buying would be needed to extend the rally. On the downside, the first layer of support is seen at $4,248, followed by $4,232, with the 20-period SMA at $4,146 and the 100-period SMA at $4,074 providing deeper structural demand if a corrective pullback unfolds.

(The technical analysis of this story was written with the help of an AI tool. Know more.)