Gold Rises On US–Iran Peace Optimism, Eases Inflation Fears, Heads For Strong Weekly Gain

Gold Rises on Hopes of U.S.–Iran Peace Deal, Heads for Weekly Gain Amid Easing Rate Fears. Gold prices climbed on Friday and were on track for a weekly gain as markets priced in optimism over a prospective U.S.–Iran peace agreement, helping temper concerns that high inflation could keep interest rates higher for longer. Considered a safe haven in times of global turmoil, gold- being a non-yielding asset- often comes under pressure when interest rates rise. However, hopes that the price shock triggered by geopolitical tensions could prove temporary supported bullion this week. Spot gold XAU= was up 0.8% at $4,720.42 per ounce, as of 0919 GMT. Bullion has gained 2.3% so far this week, marking its strongest weekly performance since March 30. U.S. gold futures GCcv1 for June delivery rose 0.4% to $4,729.80.

Markets Price In Peace Optimism As Geopolitical Tensions Flare Briefly

The United States and Iran exchanged fire on Thursday in the most serious test yet of their month-long ceasefire. However, Iran later said the situation had returned to normal, while the U.S. stated it did not want to escalate tensions further.

“The market is already pricing in a (U.S.-Iran) peace agreement, which is yet to be signed or settled upon. So we’re seeing some confidence in the precious metals market,” said independent analyst Ross Norman.

The easing of geopolitical fears helped stabilize sentiment across precious metals, even as traders remained cautious about sudden developments in the conflict zone.

Rate Outlook And Economic Data Keep Investors Cautious

Gold’s movement also reflected shifting expectations around U.S. monetary policy. Markets are closely watching whether inflation pressures from earlier oil spikes could fade, influencing the Federal Reserve’s interest rate path.

“The structural bull run is certainly still in place. I would envisage likely we would see a recovery in the precious metals complex, but not at the heady pace that we saw earlier this year,” Norman added.

Investors now await the monthly U.S. employment report due later in the day. Nonfarm payrolls are forecast to have increased by 62,000 last month after rebounding by 178,000 in March, according to a Reuters survey of economists.