Gold prices extended their winning streak to a third consecutive session, climbing more than 3% to around $4,230 per ounce, as optimism over a potential interim agreement to reopen the Strait of Hormuz eased concerns about inflation and diminished the likelihood of additional Federal Reserve rate hikes. The precious metal had posted modest gains over the previous two trading days, and silver prices followed suit, moving higher in tandem.

Expectations are building that all parties involved will reach a deal to restore the critical waterway. US President Donald Trump indicated that an agreement concerning the Strait of Hormuz could be finalized as early as Wednesday. Meanwhile, the US dollar weakened, and American crude oil prices declined further. Market participants are now fully pricing in just one interest rate increase by the Federal Reserve before the end of the year, a sharp shift from last week when two rate hikes were anticipated. A less aggressive monetary tightening path is generally supportive for non-yielding assets like gold.

Hopes for a new agreement between Iran and the United States are gaining traction. Qatar confirmed that a draft agreement has been prepared. US Treasury Secretary Scott Bessent stated that a deal to reopen the Strait of Hormuz could be reached as early as Tuesday or Wednesday. As of 10:19 a.m. in New York, spot gold was trading 3.8% higher at $4,231.79 per ounce. Silver climbed 5.1% to $62.59 per ounce. Platinum prices were largely unchanged, while palladium prices moved higher. The Bloomberg Dollar Spot Index edged lower.