Gold prices traded slightly higher on Friday and remained on course for a weekly advance as investors balanced optimism surrounding a potential U.S.-Iran peace agreement with ongoing concerns over the stability of the current ceasefire. Market participants also stayed on the sidelines ahead of key U.S. employment figures due later in the session.
Spot gold rose 0.8% to $4,723.52 per ounce by 01:35 ET (05:35 GMT), while U.S. Gold Futures added 0.5% to reach $4,731.96.
Bullion has climbed nearly 2% over the week after recovering from one-month lows touched earlier in May.
Strait of Hormuz tensions keep markets on edge
Investors continued to follow developments in the Middle East after U.S. and Iranian forces exchanged fire on Thursday near the Strait of Hormuz, marking the most serious breach so far of the ceasefire established one month ago.
Iran later stated that conditions in the affected coastal regions had normalized, while U.S. President Donald Trump told ABC News that the ceasefire remained in place.
Although gold is commonly viewed as a safe-haven investment, prices also benefited from easing inflation concerns after hopes for a broader diplomatic agreement contributed to a pullback in oil prices from recent highs.
Reduced inflationary pressure could support gold demand by lowering expectations that interest rates will stay elevated for an extended period.
A softer U.S. dollar earlier in the week also helped support bullion prices.
The U.S. Dollar Index was down 0.1% during Asian trading hours after ending the previous volatile session largely unchanged.
Markets await U.S. labor report for interest rate signals
Traders remained cautious ahead of the upcoming U.S. nonfarm payrolls report, which may provide additional guidance regarding the Federal Reserve’s future monetary policy path.
Economists expect payroll growth of approximately 65,000 jobs, while the unemployment rate is projected to remain unchanged at 4.3%. A weaker labor report could increase expectations for future Fed interest rate cuts and offer further support to non-yielding assets such as gold.
Gold prices have fallen more than 10% since tensions involving Iran escalated in late February, as surging oil prices fueled inflation fears and strengthened expectations for higher interest rates.
Silver, platinum and copper also move higher
Among other precious metals, spot silver gained 1.9% to $79.95 per ounce, while platinum advanced 1.7% to $2,060.30 per ounce.
Benchmark Copper Futures on the London Metal Exchange rose 0.4% to $13,396.33 per ton, while U.S. Copper Futures climbed 1.4% to $6.21 per pound.
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