Spot gold surged over 7% last week, surpassing $4,300. UBS: This is mainly due to expectations of the reopening of the Strait of Hormuz boosting sentiment.

Spot gold surged over 7% in a week, surpassing $4,300 per ounce. On the news front, on August 7 local time, the U.S. Bureau of Labor Statistics released the non-farm payroll numbers for July, which were significantly lower than expected. Market expectations for the Federal Reserve to maintain interest rates unchanged in September intensified, leading to a decline in the U.S. dollar index and significantly boosting gold and silver prices. Razor Hilal, a senior analyst at Gain Capital, stated that whether gold continues to rebound or retreat will largely depend on the trends in oil prices, the developments surrounding the U.S.-Iran conflict and the situation in the Strait of Hormuz, as well as the Feds policy outlook and U.S. treasury yields. UBS noted that the significant rebound in gold prices is primarily driven by the market's growing expectations for the reopening of the Strait of Hormuz. Meanwhile, UBS believes factors such as increased buying interest from China, net inflows into ETFs, a loosening interest rate environment, and a renewed market focus on reserve diversification have also contributed. On the other hand, joint measures taken by the U.S. and Japanese governments last week to stabilize the yen may have helped avoid a sell-off in U.S. treasuries, which also provided support for gold prices.