Gold Prices Surge Amid Hopes of Improved US-Iran Relations

Global Markets React to Hopes of US-Iran Deal

Gold prices rose amid renewed hopes for a deal to end the standoff between the US and Iran, a development that has dashed expectations for rate cuts from central banks worldwide. The precious metal rose as much as 0.9% after adding 1.5% in the previous session.

According to reports, Iran delivered a new proposal to the US via Pakistan on Friday, as the two sides engage in behind-the-scenes diplomacy to convert a fragile ceasefire into a lasting peace. This development has led to a decline in oil futures prices.

Despite the initial drop in gold prices when the conflict began at the end of February, the metal has lost around 12% since then. The closure of the Strait of Hormuz and the resulting energy price shock have dimmed the prospect of interest rate cuts, a headwind for non-yielding bullion.

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However, most analysts remain bullish on the precious metal. Data from the World Gold Council shows that central banks added gold holdings in the first quarter at the fastest pace in over a year. This trend is expected to continue, with a clear de-escalation in the Middle East and a dip in interest rate expectations and the dollar being key factors in gold's future price movements.

The latest data from the World Gold Council is presented below:

Spot gold rose 0.4% to $4,634.62 an ounce at 3:46 p.m. in London. Silver rose 2.9% to $75.87 an ounce, while platinum and palladium also edged higher. The Bloomberg Dollar Spot Index, a gauge of the US currency, fell 0.2% after losing 0.8% on Thursday.

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