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Wednesday, August 05, 2026
What’s happening: Gold prices traded higher this morning amid signs of a deescalation of tensions between the US and Iran.
What happened: Investors assessed reports of an agreement to reopen the Strait of Hormuz, which eased inflationary concerns.
Weakness in the US dollar, ahead of the key non-farm payrolls (NFP) report, lent further support to gold prices.
Why it matters: Since Sunday, US President Donald Trump has refrained from attacking Iran, urging Tehran to sign a peace deal aimed at reopening the Strait of Hormuz and curbing its nuclear program.
Qatar said on Tuesday that the negotiators had made progress and an interim proposal was being prepared. Both US and Iran also signalled progress in talks to restore access to the Strait of Hormuz.
Iran is considering an offer that would allow European nations to clear mines from the key waterway. Meanwhile, Saudi Arabia continued negotiations with Yemen’s Houthis via Omani mediators to avoid unrest in the Red Sea.
Progress in US-Iran talks eased inflation concerns, reducing speculations of an interest rate hike by the Federal Reserve in September. Non-yielding gold generally moves higher in a low interest-rate environment.
Weakness in the US dollar provided a boost to gold as a softer greenback makes metals cheaper for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.1% to 99.79 this morning.
Spot price for gold jumped 1.4% to $4,133.51 an ounce this morning, after surging over 1% during the previous session.
In other metals trading, spot price for silver gained 2.1% to $60.7995, platinum price rose 1.6% to $1,765.20 and palladium added 1.6% to $1,370.33.
What to watch: Investors will keep an eye on talks between the US and Iran.
Data on US jobs report for July will remain in focus. The US economy, which added 57,000 jobs in June, is expected to add 80,000 jobs in July. The US unemployment rate, which fell to 4.2% in June from 4.3% in the previous month, is expected to remain at 4.2% in July. Analysts expect average hourly earnings for all employees on private nonfarm payrolls to rise by 0.3% in July, the same pace as the previous month.
Context: Equity markets in the US recorded sharp gains on Tuesday, with the S&P 500 and Dow Jones index surging to new record highs.
Details: The S&P 500 closed above the key 7,700 level driven by strong earnings releases and a further decline in crude oil prices amid prospects of the Strait of Hormuz reopening.
Information technology and materials stocks were among the top performers on Tuesday, while utilities and energy stocks settled lower during the session.
Chip stocks recorded sharp gains, continuing their rebound after recording losses in July. Shares of Micron Technology surged more than 7%, while Marvell Technology’s stock jumped around 13% on Tuesday.
Palantir Technologies recorded its best day in over two years, with its stock surging 30% after the company reported strong results for the second quarter. Shares of Caterpillar rose more than 5% after the company reported upbeat second-quarter results and raised its revenue growth forecast. Pfizer’s stock also settled higher after the pharma giant reported better-than-expected second-quarter earnings.
On the economic data front, the US trade deficit narrowed to $73.3 billion in June from $77.6 billion in May, with imports contracting 1.8% and exports declining 0.9%.
The Dow Jones index jumped 907.47 points, or 1.71%, to close at 54,085.88 on Tuesday, while the S&P 500 gained 1.79% to settle at 7,736.52. The Nasdaq 100 jumped 3.32% to close at 29,733.16.
What to watch: Investors will keep an eye on the ongoing negotiations between the US and Iran.
Data on ADP employment change (1615 UAE Time), S&P Global composite PMI (1745 UAE Time) and ISM services PMI (1800 UAE Time) from the US will be released today. Private businesses in the US, which added 98,000 jobs in June, are expected to add 70,000 jobs in July. Analysts expect the S&P Global composite PMI to surge to 53.6 in July from 51.9 in the previous month, while the ISM services PMI is expected to rise to 54.5 in July from 54.0 in June.
Other Markets: European indices closed higher on Tuesday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index up by 0.20%, 0.77%, 0.61% and 0.73%, respectively.
Russia launched a ballistic missile attack on Ukraine’s capital city of Kyiv. The news sent the USD/RUB pair lower in forex trading this morning.
China’s RatingDog general services PMI fell to 50.4 in July from 54.1 in the previous month. Services activity remaining in the expansion zone exerted pressure on the USD/CNY forex pair.
Singapore’s S&P Global PMI surged to 59.2 in July from 57.4 in the previous month. This being the strongest growth since February sent the USD/SGD pair lower in forex trading this morning.
Hong Kong’s S&P Global SAR PMI declined to 51 in July from 52.0 in the previous month, which lent support to the USD/HKD forex pair.
Australia’s Ai Group Industry Index for manufacturing declined to -19.6 in July from a reading of -13.9 in June, which sent the AUD/USD pair lower in forex trading this morning.
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