Gold Remains Stable, Set for Fourth Weekly Increase Amid US-Iran Deal Hopes
Gold prices held steady on Friday, setting the stage for a fourth consecutive weekly gain, bolstered by positive sentiment surrounding a potential peace deal between the U.S. and Iran that has alleviated inflation concerns and weakened the dollar. Spot gold was nearly unchanged at $4,799.85 per ounce as of 1156 GMT, marking a rise of about 1% for the week. Meanwhile, U.S.
gold futures for June increased by 0.3% to $4,822.40. U.S. President Donald Trump expressed optimism that a resolution to the Iran conflict could soon be achieved, coinciding with the initiation of a 10-day ceasefire between Israel and Lebanon. Global stock markets remained near record highs, poised for their third consecutive week of gains.
According to independent analyst Ross Norman, 'From the perspective of gold, there is a noticeable shift towards riskier assets, particularly equities, which are at unprecedented levels. However, gold is still benefiting from the prevailing weakness of the dollar and the decline in Treasury yields.' The U.S. dollar is on track for its second consecutive weekly decline, hovering near six-week lows, which makes gold cheaper for holders of other currencies.
The hope for a U.S.-Iran deal has kept oil prices below $100 per barrel, thus easing inflation fears. Rising energy costs have contributed to inflation concerns and heightened speculation that interest rates may remain elevated for an extended period. Gold prices have decreased nearly 8% since the onset of the U.S.-Israeli conflict with Iran on February 28.
While gold is traditionally viewed as a hedge against inflation, higher interest rates tend to reduce demand for this non-yielding asset. Traders currently estimate a nearly 31% likelihood of at least one 25-basis-point cut in U.S.
interest rates by December, whereas prior to the conflict, expectations were for two cuts this year. In a related development, Indian banks have suspended gold and silver import orders from foreign suppliers, resulting in a backlog of metals at customs due to the absence of a formal government directive authorizing bullion imports.
Spot silver increased by 1.5% to $79.58 per ounce, aiming for a fourth consecutive weekly gain, while platinum dipped by 0.2% to $2,081.95, and palladium rose by 0.3% to $1,555.95, with both metals also on track for their third straight weekly increase.
