Gold Prices Rise on Iran Peace Deal Amid Fed Rate Uncertainty
Spot gold increased 1.4% to $4,317.80 an ounce by 21:20 ET (01:20 GMT) in Asian trading, reversing the 1.7% decline seen in the prior session. U.S. gold futures, however, slipped 1% to $4,339.30. The rally was sparked by investor optimism surrounding the signing of a U.S.–Iran interim peace agreement, which is expected to ease Middle‑East tensions and reopen key energy export routes.
The agreement is outlined in a 14‑point memorandum that initiates a 60‑day negotiation period. Iran has committed to allow toll‑free passage through the Strait of Hormuz, with full traffic restoration targeted within 30 days, thereby reducing fears of a prolonged oil‑supply shock and its inflationary impact.
Meanwhile, the Federal Reserve held its policy rate steady in the 3.50%‑3.75% range but signaled that policymakers still see scope for tighter monetary policy later in the year. Updated projections show nine of 19 Fed officials now expect at least one rate increase in 2026, a shift from earlier expectations. In his first meeting as Fed chair, Kevin Warsh reiterated a firm stance on inflation and the central bank’s commitment to price stability, while the Fed also raised its inflation forecasts, prompting investors to scale back expectations for rate cuts and bolstering the U.S. dollar.
The U.S. Dollar Index edged 0.2% higher on Thursday after a 0.6% jump in the previous session, making dollar‑denominated gold more expensive for overseas buyers and increasing the opportunity cost of holding non‑yielding bullion. Among other precious metals, silver rose 2.4% to $69.54 per ounce and platinum gained 1.4% to $1,765.60 per ounce.