While gold is considered an inflation hedge, higher interest rates crimp demand for the non-yielding asset.
Gold held largely steady on Friday and was on track for a fourth straight weekly gain, as hopes for a US-Iran peace deal eased fears of higher inflation and elevated interest rates.
Spot gold rose 0.2 per cent to $4,797.49 per ounce by 0435 GMT and was up 1.1 per cent so far this week. US gold futures for June climbed 0.2 per cent to $4,818.80.
A 10-day ceasefire between Lebanon and Israel went into effect on Thursday and US President Donald Trump said the next meeting between the United States and Iran may take place over the weekend.
“Investors are now watching closely for concrete progress in US-Iran negotiations. Any progress or extension of the current fragile ceasefire could further calm oil markets and inflation fears, potentially unlocking more upside for gold,” said Tim Waterer, chief market analyst at KCM Trade.
The US dollar was headed for a second weekly drop, making greenback-denominated commodities more affordable for holders of other currencies.
Oil prices fell, easing fears of higher inflation on optimism that the Iran war could be nearing an end.
Concerns that higher energy prices could stoke inflation and keep global interest rates higher for longer have driven down gold prices by more than 8 per cent since the Iran war began in late February.
While gold is considered an inflation hedge, higher interest rates crimp demand for the non-yielding asset.
“While we expect further downside pressure (on gold) as the year progresses, ongoing geopolitical risks are likely to keep prices supported above a firm floor of $3,500/oz, underpinned by gold’s safe-haven characteristics,” BMI, a unit of FitchSolutions, said in a note.
Traders now see a 27 per cent chance of a 25-basis-point Federal Reserve interest rate cut in December. Before the war, there were expectations of two reductions for this year.
Meanwhile, Indian banks have halted gold and silver import orders from overseas suppliers, with tons of the metals stuck at customs as a formal government order has not been issued authorising bullion imports.
Spot silver rose 0.9 per cent to $79.12 per ounce, and was headed for a fourth straight weekly gain.
Platinum gained 0.3 per cent to $2,092.07 and palladium was up 0.5 per cent at $1,558.47. Both the metals were on track for a third straight weekly gain.
Published on April 17, 2026
