Gold Retreats from $4,700 as Easing Hormuz Strait Tensions Cool Safe-Haven Demand

Spot gold failed to hold the $4,700 level during Tuesday's North American session, pulling back from multi-month highs. The trigger was rising market expectations that US-Iran tensions could ease, which weakened gold's safe-haven appeal and triggered selling below the key psychological level.

**Geopolitical Risk Premium Fades, Stronger Dollar Pressures Gold**

Earlier, US Treasury Secretary Bessent announced the launch of actions to sever Iran's ties with the global economy, while Iran warned it might halt oil exports through the Strait of Hormuz, pushing gold near $4,700. However, as the situation did not escalate further, some safe-haven funds began to exit. Meanwhile, inflation concerns stemming from oil price volatility kept markets pricing in roughly a 75% probability of a rate hike by year-end, which supported the dollar and in turn pressured dollar-denominated gold, prompting bulls to take profits near multi-month highs.

**"Currency Debasement Trade" Logic Remains, Limiting Gold's Downside**

Despite the short-term pullback, renewed concerns over the US Treasury debt surpassing $40 trillion have resurfaced, offsetting the temporary boost from Treasury buybacks and reigniting the "currency debasement trade." According to market analysis, this logic may continue to support demand for gold as an alternative store of value. Additionally, cooling expectations for a September Fed rate hike have left traders reluctant to place aggressive bullish bets on the dollar, thereby limiting gold's downside to some extent.

**Market Focus Shifts to Key Events, Short-Term Volatility May Intensify**

Attention is now turning to the upcoming US PCE inflation data and the Fed Chair's speech at Jackson Hole for clearer policy path clues. According to Citigroup analysis, if the Fed signals a hawkish stance, it could interrupt gold's recent rally; conversely, an unexpected dovish signal would provide a strong boost to gold. Ahead of these key events, gold prices may remain in a high-level consolidation pattern.