Gold prices today rose on Thursday, supported by a weaker US dollar, as markets weighed optimism over a potential US-Iran deal and its impact on inflation and interest rates.
Spot gold climbed 0.7% to $4,821.44 per ounce by 0301 GMT, while US gold futures for June delivery gained 0.4% to $4,844.40.
The US dollar hovered near its lowest level in six weeks, making dollar-priced commodities such as gold more attractive to holders of other currencies. Meanwhile, benchmark 10-year US Treasury yields edged down 0.1%, offering additional support to the non-yielding metal.
“The primary driver for gains in gold is optimism surrounding a possible US-Iran ceasefire,” said Kelvin Wong, senior market analyst at OANDA.
He added that a sustained break above $4,900 could open the door to further upside, with the next key resistance seen around the psychologically important $5,000 level.
How geopolitical tensions are shaping bullion markets
On Wednesday, the Trump administration expressed confidence about reaching a deal to end the war with Iran while warning of increased economic pressure if Tehran refuses to cooperate.
Donald Trump said he believes the conflict he initiated alongside Israel in late February is nearing its end, despite the implementation of a shipping blockade and sharply reduced traffic through the Strait of Hormuz.
Spot gold prices have fallen more than 8% since the war began, pressured by concerns that elevated energy costs could push inflation higher and keep global interest rates elevated for longer.
Although gold is traditionally viewed as a hedge against inflation, higher interest rates tend to weigh on demand by increasing the opportunity cost of holding the metal.
In the United States, traders are now pricing in a 29% probability of a 25-basis-point interest rate cut later this year, down sharply from expectations of two cuts prior to the outbreak of the conflict.
Elsewhere in precious metals, spot silver rose 1.7% to $80.41 per ounce, platinum gained 1.2% to $2,135.58, while palladium advanced 0.9% to $1,587.39.
