Gold prices are holding relatively stable, poised for a fourth consecutive week of gains. This stability is attributed to growing optimism surrounding a potential agreement between the US and Iran, which is alleviating inflation concerns and dampening expectations for central bank rate hikes. While uncertainty remains regarding the full extent and timeline of oil supply restoration, the anticipation of an Iran deal is already impacting oil prices and, consequently, the gold market.
- Gold held steady near $4,800 an ounce.
- Gold is on track for a fourth consecutive weekly advance.
- Prospects for a US-Iran ceasefire agreement are easing inflation concerns.
- Trump claimed Tehran agreed to terms including abandoning nuclear ambitions and supplying “free oil”.
- The Strait of Hormuz remains effectively closed under a dual blockade.
- Restoring oil and gas output could take up to two years.
- Oil prices have retreated sharply amid growing optimism over a potential Iran deal.
- Gold is set to rise by about 1% this week.
- Gold remains roughly 17% above its March low.
The market response suggests a belief that increased oil supply from Iran, if realized, would ease inflationary pressures, thus reducing the need for aggressive monetary policy tightening. This scenario benefits gold by potentially limiting further upside for interest rates, which can weigh on the non-yielding asset. However, the effectiveness and timing of any agreement are still to be determined, and any disruption to oil supply could support prices.