Gold Gains 0.2% on Iran Deal Hope
Spot gold edged higher on Friday, adding 0.2% to close at $4,218.91 per ounce, while gold futures rose 3.1% to $4,239.75 per ounce. Despite the daily uptick, the market remained on a weekly downtrend, with spot prices down 2.6% and futures down 2.9% for the week.
The price movement was driven by contrasting forces. President Donald Trump announced that a U.S.–Iran peace agreement had been approved and could be signed over the weekend, suggesting the Strait of Hormuz would be reopened and an American naval blockade lifted. Trump also asserted that Iran would “never” possess a nuclear weapon under the deal, though he later criticized Iran’s rhetoric as unrelated to the truth. Iran’s foreign minister Seyed Abbas Araghchi countered that a memorandum of understanding (MoU) with Washington was “never been closer,” and Pakistan Prime Minister Shehbaz Sharif affirmed that a final text had been reached and Pakistan was working with both sides to finalize next steps.
Against this backdrop, crude oil benchmarks fell on Friday, with Brent futures hitting their lowest level in over two months, though still trading above the pre‑war benchmark of $70 per barrel. The oil price dip reflected reduced geopolitical risk but the market remains sensitive to oil‑driven inflation.
Investors also weighed upcoming central‑bank decisions. Recent U.S. CPI and PPI data showed headline inflation in May posting its biggest annual jumps since April 2023 (CPI) and November 2022 (PPI), while core figures were milder. With headline numbers at three‑year highs and a strong labor market, the Federal Reserve is expected to keep the federal funds target range at 3.5‑3.75% and may even consider tightening further. The first FOMC meeting under new chair Kevin Warsh is scheduled for next week. JPMorgan analyst Michael Feroli forecast no change to the target range and noted that the post‑meeting press conference will be closely watched, emphasizing the chair’s role in shaping monetary‑policy narrative.
Other central banks on the agenda include the Bank of Japan, the Bank of England, and the European Central Bank. The ECB became the first major reserve bank to hike rates, citing an Iran‑linked oil price spike as a key factor.
The article was contributed by Ayushman Ojha and Scott Kanowsky.