Gold prices continued higher on Thursday, marking a third straight session of gains as optimism surrounding possible peace negotiations between the United States and Iran eased inflation worries and weakened the U.S. dollar, increasing demand for safe-haven assets.
Spot gold climbed 1% to $4,736.61 an ounce by 02:55 ET (06:55 GMT), while June U.S. gold futures rose 1.1% to $4,746.86.
The precious metal had already rallied more than 3% on Wednesday, posting its strongest one-day gain since late March after oil prices fell sharply on expectations that tensions in the Middle East could begin to ease.
Hopes for diplomatic progress support bullion demand
Investor sentiment improved after Axios reported that the White House was nearing an agreement with Iran on a memorandum of understanding intended to help bring the conflict to an end.
Iran said it was evaluating the proposal, while U.S. President Donald Trump stated that he believed Tehran was willing to reach a deal.
Oil prices plunged more than 7% on Wednesday following reports of progress in negotiations, although crude markets steadied on Thursday as traders waited for additional details surrounding the talks.
Expectations of lower energy costs helped ease fears of sustained inflationary pressure, weighing on U.S. Treasury yields and the dollar while boosting the appeal of non-interest-bearing assets such as gold.
“The potential easing in energy prices gives the Fed more room to cut rates, which is positive for gold,” ING analysts said in a note.
Investors await key U.S. labour market figures
The U.S. Dollar Index slipped 0.1% during Asian trading after declining 0.4% overnight, moving back toward levels seen before the outbreak of the conflict.
Attention is now focused on Friday’s U.S. non-farm payrolls report, which investors expect could offer fresh insight into the Federal Reserve’s next policy moves after recent remarks from Fed officials warned that the Middle East conflict could increase inflationary pressures and disrupt global supply chains.
Silver and platinum move higher alongside gold
Elsewhere in precious metals markets, silver gained 1.9% to $78.79 per ounce, while platinum rose 0.4% to $2,072.55 per ounce.
In industrial metals trading, benchmark copper futures on the London Metal Exchange were little changed at $13,391.33 per ton, while U.S. copper futures remained broadly flat at $6.20 per pound.
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