Gold Prices Rise as Investors Monitor US-Iran Peace Prospects
Gold prices moved higher on Friday and remained on track for a weekly gain as investors balanced optimism surrounding a potential U.S.-Iran peace agreement with ongoing caution over the fragile ceasefire in the Middle East.
Markets were also focused on the upcoming U.S. nonfarm payrolls report, which could provide important clues about the future direction of Federal Reserve interest rates.
Spot gold climbed 0.8% to $4,723.52 per ounce, while U.S. gold futures gained 0.5% to $4,731.96.
Bullion prices have risen nearly 2% this week after recovering from one-month lows reached earlier in May.
Strait of Hormuz Conflict Keeps Markets on Edge
Investor attention remained firmly on developments in the Middle East after U.S. and Iranian forces exchanged fire near the Strait of Hormuz on Thursday, marking the most serious violation yet of the month-old ceasefire agreement.
Iran later stated that conditions in the affected coastal regions had stabilized, while President Donald Trump said the ceasefire remained in place despite the recent escalation.
Although gold is traditionally considered a safe-haven asset during geopolitical uncertainty, prices also received support from easing inflation concerns after hopes for a broader peace agreement helped cool oil prices from recent highs.
Lower oil prices may reduce inflation pressures and ease fears that interest rates will remain elevated for an extended period, which is generally supportive for gold prices.
US Dollar and Fed Expectations Support Bullion
Gold prices also benefited from a weaker U.S. dollar earlier in the week.
The U.S. Dollar Index traded slightly higher during Asian trading hours after finishing mostly unchanged during a volatile previous session.
Investors remained cautious ahead of the closely watched U.S. jobs report, which could heavily influence market expectations for Federal Reserve policy.
Analysts currently expect U.S. payroll growth of around 65,000 jobs, while the unemployment rate is forecast to remain steady at 4.3%.
A weaker-than-expected employment report could strengthen expectations for future Federal Reserve interest rate cuts, potentially boosting demand for non-yielding assets such as gold.
Precious Metals and Copper Prices Move Higher
Despite this week’s rebound, gold prices remain more than 10% below levels seen before the Iran conflict intensified in late February. Rising oil prices earlier in the crisis had increased inflation concerns and pushed interest rate expectations higher.
Elsewhere in the precious metals market, spot silver gained 1.9% to $79.95 per ounce, while platinum rose 1.7% to $2,060.30 per ounce.
Copper prices also advanced, with benchmark copper futures on the London Metal Exchange rising 0.4% to $13,396.33 per ton. U.S. copper futures climbed 1.4% to $6.21 per pound.
