Spot gold prices surged to above $4,100 an ounce on Monday, climbing as much as 1.6% in early trading.
The rally was driven by a temporary de-escalation in tensions between the US and Iran over the weekend, which reduced immediate fears of a prolonged shipping blockade in the critical energy chokepoint.
US officials indicated that Washington is nearing a deal with Iran to reopen the Strait of Hormuz as early as today, August 5.
The potential resolution marks a significant shift from earlier reports that US President Donald Trump had ordered the reinstatement of a naval blockade on Iranian ports, a move that had previously escalated tensions and disrupted global energy flows.
The prospect of restored shipping routes has provided relief to markets that have been pricing in severe supply chain disruptions.
While the immediate impact is visible in precious metals, the development also carries implications for Brent crude and tanker equities, which have been volatile amid the geopolitical standoff.