Gold rose for a third straight session on Thursday, supported by a softer dollar as hopes grew for a potential peace deal between the United States and Iran.
Chalinee Thirasupa | Bloomberg | Getty Images
Gold rose for a third straight session on Thursday, supported by a softer dollar as hopes grew for a potential peace deal between the United States and Iran.
Spot gold was up 0.3% at $4,701.19 per ounce, as of 0231 GMT, after rising about 3% on Wednesday to hit its highest level since April 27. U.S. gold futures for June delivery rose 0.4% to $4,710.
Iran said on Wednesday it was reviewing a U.S. peace proposal that sources said would formally end the war while leaving unresolved the key U.S. demands that Iran suspend its nuclear programme and reopen the Strait of Hormuz.
“I think most markets overreacted as (the deal) is still a work in progress and anything could unravel. Nevertheless, we saw enough dollar weakness to propel gold prices higher. Lower Treasury yields also boosted gold,” said Edward Meir, an analyst at Marex.
Gold could remain rangebound in the near term, trading between $4,600 and $5,100 an ounce, he said.
The dollar edged down 0.1%, making bullion less expensive for holders of other currencies.
Benchmark 10-year U.S. Treasury yields have eased 0.6% so far this week, lowering the opportunity cost of holding gold.
Brent crude oil prices are down about 6% so far this week as optimism grew about a possible end to the war in the Middle East.
Gold prices have fallen more than 10% since the war began in late February.
Elevated crude oil prices can stoke inflation, increasing the likelihood of higher interest rates. While gold is seen an inflation hedge, high interest rates tend to weigh on the non-yielding asset.
Investors now await the monthly U.S. employment report on Friday to see if the U.S. economy remains resilient enough to keep the Federal Reserve’s monetary policy on hold.
Spot silver rose 0.5% to $77.68 per ounce, platinum was steady at $2,060.18, and palladium was down 0.1% at $1,536.54.