Gold prices edged higher on Thursday as easing energy costs and a weaker U.S. dollar improved the appeal of the precious metal, while investors looked ahead to key U.S. labour market data due later this week.
Spot gold climbed 0.7% to $4,465.24 an ounce by 06:23 ET (10:23 GMT), while gold futures gained 0.6% to $4,493.12 an ounce.
The move followed a renewed ceasefire agreement between Israel and Lebanon that helped reduce immediate concerns over a broader escalation in the Middle East. The development also fuelled optimism that diplomatic efforts between the United States and Iran could eventually gain traction.
After a fourth round of U.S.-brokered talks, Israel and Lebanon announced that the ceasefire would be “contingent on a complete cessation of Hezbollah fire and the evacuation of all Hezbollah operatives” from territory south of the Litani River.
“These steps will enable progress towards a comprehensive peace and security agreement,” according to a joint statement.
Hezbollah did not participate in the discussions.
Market sentiment was further supported by comments from President Donald Trump, who suggested that progress in negotiations with Iran could emerge in the coming days. Iranian officials also indicated that communication with Washington remains ongoing.
Reports additionally suggested that the White House may be reluctant to escalate military operations unless U.S. forces suffer direct casualties, helping ease some geopolitical risk premiums across financial markets.
Oil Retreats but Supply Concerns Persist
Crude prices moved lower following the ceasefire announcement, with Brent falling 1.5% to $96.30 per barrel and WTI declining 1.2% to $94.84.
Even so, energy markets remain affected by ongoing supply constraints linked to disruptions around the Strait of Hormuz. As a result, inflation concerns have not fully disappeared.
Investors continue to debate whether elevated energy costs could force central banks to keep borrowing costs higher for longer. Such expectations have weighed on gold at times because the metal does not generate interest income.
Thursday’s decline in Treasury yields helped offset those concerns. Lower bond yields tend to improve the attractiveness of gold by reducing the opportunity cost of holding non-yielding assets.
“We expect most central banks across developed markets—including the Federal Reserve, Bank of England, and others—to keep rates unchanged in the near term,” UBS analysts said.
Labour Market Data in Focus
Attention is now shifting to Friday’s U.S. jobs report, one of the most closely watched economic releases of the month.
The data could offer valuable insight into the resilience of the U.S. economy and help investors assess how policymakers may respond to evolving inflation and employment trends.
For gold traders, the report may prove particularly important as expectations surrounding Federal Reserve policy remain a key driver of precious metals prices.
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