TLDR
- Gold rose around 0.7–0.8% Friday on reports the U.S. and Iran are near a 60-day ceasefire deal
- A tentative agreement would reopen the Strait of Hormuz, sending oil prices lower
- Lower oil prices eased inflation fears, pushing bond yields and the dollar down — supporting gold
- The Fed’s preferred inflation gauge, PCE, hit 3.8% year-on-year in April, its fastest pace in three years
- Analysts say gold’s long-term role as a safe haven remains intact despite short-term pressure
Gold gained on Friday as reports of a U.S.-Iran ceasefire deal cooled oil prices and eased inflation concerns, giving the precious metal a modest lift heading into the weekend.
U.S. and Iran Near a Deal
Washington and Tehran have reportedly reached a tentative agreement on a 60-day ceasefire that would reopen the Strait of Hormuz to shipping. The proposal still needs approval from President Donald Trump and confirmation from Iran.
The news sent oil prices lower. That matters for gold because rising energy costs had been feeding inflation fears, which in turn pushed bond yields higher and weighed on bullion.
Spot gold rose 0.8% to $4,532.80 an ounce on Friday. Gold futures were up 0.7% at $4,563.50 an ounce. The metal is on track for a modest weekly gain of around 0.7%.
Gold had fallen to a two-month low in the prior session before recovering after the ceasefire reports emerged.
Inflation Still a Concern
Data released Thursday showed the U.S. personal consumption expenditures price index rose 3.8% year-on-year in April. That is the fastest pace in roughly three years and the Fed’s preferred measure of inflation.
The hot inflation reading reinforced expectations that the Federal Reserve will keep interest rates elevated well into next year. Higher rates are generally negative for gold, which pays no yield.
Treasury yields eased slightly after the data but remained near multi-month highs.
ING analysts noted that markets remain cautious over whether diplomatic progress will hold. They added that persistent energy-driven inflation could keep interest rate expectations elevated, which is a headwind for non-yielding assets like gold.
Saxo Bank analysts said the easing of energy-driven inflation concerns helped push bond yields and the dollar lower, providing support to gold. However, they noted gold remains in a difficult technical position.
Long-Term Case Remains
Analysts at OCBC said gold’s recent weakness does not point to a breakdown in its safe-haven role. The decline appears driven by macro factors rather than a shift in investor sentiment toward gold.
OCBC’s wealth advisory team pointed to continued central bank buying, reserve diversification, and geopolitical hedging as reasons the long-term case for gold remains intact. Bank of Singapore research suggests an optimal portfolio exposure to gold of around 4%.
Other precious metals were mixed. Silver edged down 0.1% to $75.57 an ounce. Platinum also fell 0.1% to $1,921.35 an ounce. Copper futures on the London Metal Exchange eased 0.2% to $13,692 a ton.
Gold’s direction in the near term will likely depend on whether the U.S.-Iran ceasefire deal is formally confirmed and whether oil prices continue to fall.
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