Gold held a gain after reports that the US and Iran had reached a tentative deal to extend a ceasefire and work toward an agreement to end the Middle East war eased inflation concerns.
Bullion traded near $4,500 an ounce, after closing up 1% on Thursday despite touching a two-month low earlier in the session when airstrikes risked derailing the peace talks. The US and Iran have now reached a tentative agreement to extend a ceasefire by 60 days and launch further talks on Tehran’s nuclear program, a person with knowledge of the matter said.
The deal is pending final approval from US President Donald Trump.
“Gold’s rebound overnight looks more like a broader macro relief trade,” said Christopher Wong, a strategist at Oversea-Chinese Banking Corp Bullion will be able to find better support when rate-hike concerns fade, but “follow-through may remain uneven until there is clearer visibility on Hormuz access and the terms of any US-Iran agreement,” he said.
The effective closure of the Strait of Hormuz has sent an inflationary shock through the global economy, fueling concerns that central banks may need to keep interest rates higher for longer. Bullion typically performs worse in a higher-rate environment as it pays no interest.
Reflecting the pressure, US consumer spending edged up in April, with annual inflation accelerating to the fastest since 2023, the latest data show. The US economy expanded in the first quarter at a 1.6% annualised pace, slower than previously estimated.
Bullion has traded in a narrow range since its initial slump at the start of the war as traders weighed conflicting signals about progress toward a ceasefire, and is down around 15% since the end of February.
Spot gold was 0.3% higher at $4 507.47 an ounce as of 10:47 a.m. in Singapore. Silver rose 0.4% to $75.96. Platinum and palladium were little changed. The Bloomberg Dollar Spot Index, a gauge of the US currency, was flat after dipping 0.2% in the previous session.
