On Wednesday, shares of gold mining companies broadly advanced, with Gold Fields (GFI.US) surging more than 9%. AngloGold (AU.US) gained nearly 9%, while Harmony Gold (HMY.US) and Kinross Gold (KGC.US) each rose over 8%. Coeur Mining (CDE.US) climbed more than 7%, Newmont (NEM.US) advanced nearly 7%, and US Gold Corp (USAU.US) added over 4%.

The rally comes as international gold prices continue to climb, with spot gold breaking above the $4,220.00 per ounce mark, last trading at $4,220.05, up 3.50% on the day. Meanwhile, COMEX gold futures are trading at $4,279.40 per ounce, gaining 3.05%.

Market expectations that the U.S. and Iran may reach a temporary agreement to reopen the Strait of Hormuz have eased inflation concerns. This development has prompted traders to scale back bets on further Federal Reserve tightening, providing a tailwind for gold prices. The market now anticipates just one more rate hike by the Fed before year-end, a sharp contrast to last week when two hikes were priced in. Since gold yields no interest, a less aggressive monetary tightening path benefits the yellow metal.

Ryan McKay, Senior Commodity Strategist at TD Securities, noted that the combination of optimism over a U.S.-Iran deal and diminishing fears of broader economic risks has jointly fueled the precious metals rally. "The current price levels for gold and silver could also trigger short-covering inflows," McKay wrote in a report. He added that the Bank of Korea's resumption of gold purchases has served as a positive catalyst. Furthermore, recent inflows into Asian gold ETFs confirm a shift in regional sentiment over the past few weeks.