Gold holds steady, eyes 4th weekly gain on US-Iran peace deal hopes.
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 eased 0.1 percent to $4,784.72 per ounce by 9:46 a.m. Saudi time, but was up about 1 percent so far this week. US gold futures for June fell 0.1 percent to $4,805.20.
A 10-day ceasefire between Lebanon and Israel went into effect on Thursday and US President Donald Trump said the next meeting between the US 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 percent 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.
Traders now see a 27 percent 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 authorizing bullion imports.
Gold demand in India was modest this week, as high domestic prices weighed on retail purchases ahead of the key Akshaya Tritiya festival weekend, while premiums in China held steady.
Spot silver rose 0.3 percent to $78.61 per ounce, and was headed for a fourth straight weekly gain.
Platinum fell 0.3 percent to $2,079.24 and palladium was down 0.5 percent at $1,542.50. Both the metals were on track for a third straight weekly gain.
Source: Arabnews