Gold price futures (GC=F) rose to $4,222.92 on August 5, 2026, marking three straight days of gains and a near one-month high. Progress in US-Iran talks to reopen the Strait of Hormuz led to
Gold price futures (GC=F) rose to $4,222.92 on August 5, 2026, marking three straight days of gains and a near one-month high. Progress in US-Iran talks to reopen the Strait of Hormuz led to a drop in crude oil prices and softened inflation expectations.
This has prompted a shift in Federal Reserve rate-hike forecasts from two increases to one by the year’s end, according to CME FedWatch data cited by CNBC. Spot XAU/USD also climbed 1.3% to $4,127.04, while the US dollar index (DXY) fell to around 99.70.
SOURCE: KalshiThree key factors are driving gold prices higher: a 14-day streak of net inflows into Chinese gold-backed ETFs, a bullish 4-hour chart structure in XAU/USD following a break above the 200-period EMA, and declining real yields.
This environment reduces the opportunity cost of holding non-yielding assets, benefiting both gold and Bitcoin, and by proxy, the broader cryptocurrency market.
$XAU$GOLD$GLDWe have a breakout… pic.twitter.com/hFaZLi2l9G
— Michael Isakov (@michaelsisakov) August 5, 2026
The sequence linking Strait of Hormuz diplomacy to Fed rate-hike repricing involves four main steps. First, progress in reopening this crucial waterway, through which about 20% of global oil flows, decreases the risk premium in crude prices, with WTI dropping to around $76.06 and Brent to $80.09. Second, lower oil prices directly impact CPI expectations, reversing the inflation pressures that had kept the Fed aggressive since the US-Iran conflict escalated.
As a result, softer CPI expectations lead to a reduced terminal rate trajectory. Traders adjusted their expectations from two Fed rate hikes by year-end to one, with a 59% probability cited for a hike at the September Federal Open Market Committee meeting, down from 67%. Fourth, the tightening expectations lower the DXY, as the dollar’s yield premium narrows.
Treasury Secretary Scott Bessent indicated a potential deal with Iran to reopen the Strait, supported by reports of progress from Oman and Qatar. However, Tehran denied formal talks were underway, and J.P. Morgan emphasized the uncertainty surrounding the Iran conflict resolution, categorizing it as a catalyst for repricing rather than a definitive shift in the macroeconomic landscape.
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The DXY’s decline toward 99.70 and falling Treasury yields have recreated some of the macro conditions that previously fueled Bitcoin’s rallies. Dollar weakness benefits crypto in two ways.
First, it makes BTC cheaper for non-US buyers and lowers the opportunity cost of holding non-yielding assets like Bitcoin and gold as real yields fall. When short-duration Treasury yields drop relative to inflation expectations, zero-yield assets become more appealing.
The current situation differs from early 2026, when inflation fears from rising gas prices linked to the Iran war kept the Fed hawkish, causing gold to underperform against equities and Bitcoin.
Now, the shift stems from declining oil prices and interest rate expectations, making it a real-yield and dollar trade rather than a geopolitical safe-haven move. This is crucial for crypto, as institutional investment in Bitcoin ETFs has historically surged under similar conditions.
Additionally, China’s recent gold ETF inflow streak, with 14 consecutive days of inflows, mirrors Bitcoin’s ETF dynamics and indicates that institutional investors are positioning based on real yields and dollar trends rather than merely chasing momentum.
J.P. Morgan reports that China’s net gold price imports soared to 317 tons in Q1 2026, signifying strategic accumulation by the People’s Bank of China amid renminbi reserve diversification following the 2022 Russian asset freeze.
BREAKING: Spot gold prices surge above $4,200/oz, hitting the highest level since June 22nd.Precious metals continue to gain momentum amid mounting inflation and uncertainty. pic.twitter.com/Syv330XQ5Y
— The Kobeissi Letter (@KobeissiLetter) August 5, 2026
J.P. Morgan’s commodities research predicts XAU/USD will average $6,000/oz in Q4 2026, down from $6,300/oz in February, with potential for $6,300/oz by the end of 2027. This 5% reduction reflects waning investor interest and uncertainty over the Iran resolution timeline.
Analyst Shearer noted gold is “stuck” in a range above the 200-day moving average at $4,340/oz and below the 50-day at $4,730/oz, with concerns about the Fed responding to inflation impacting investor focus on gold.
The bear scenario, where strong US growth and rising inflation prompt Fed rate hikes, could lead to outflows from gold ETFs and dampen gold prices, alongside similar effects for Bitcoin in a tightening environment. Shearer considers this a challenging outlook for 2026, though some Fed officials support tighter policy.
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Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.
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