Gold Steadies as Iran Talks Reduce Inflation Concerns

Gold steadied around $4,790 an ounce on Thursday, after a 1.1% drop in the previous session, as efforts to reach a diplomatic resolution to the Iran conflict eased inflation concerns despite ongoing tensions around the Strait of Hormuz. The US and Iran are reportedly considering extending a two-week ceasefire to allow further negotiations, with both sides signaling willingness to pursue diplomacy after inconclusive talks in Pakistan. Still, shipping through Hormuz remains heavily restricted, with the US blockading Iranian vessels and Tehran limiting broader traffic. President Donald Trump said the war is “close to over,” helping support sentiment across markets. Softer oil prices have reduced inflation fears, reinforcing expectations that the Federal Reserve will keep rates on hold, though uncertainty around policy and geopolitical risks continues to underpin gold demand.

Gold climbed back above $4,800 an ounce on Thursday, recovering from the prior session’s losses as investors assessed the outlook for renewed negotiations and a potential long-term peace deal between the US and Iran that could help ease inflation pressures. Reports suggested Washington and Tehran are considering extending their two-week ceasefire to allow more time for talks, even as the Strait of Hormuz remains effectively closed under a dual blockade. Attention is now shifting to a possible second round of US-Iran discussions, expected to focus on reopening the strait and Iran’s nuclear enrichment program. Gold has drawn support in recent weeks as diplomatic progress in the Middle East reduced concerns over inflation and possible central bank tightening. However, the precious metal remains nearly 9% lower since the conflict began.

Gold traded around $4,820 per ounce on Wednesday, just below one-month highs, as investors weighed developments in US-Iran peace talks aimed at ending Middle East hostilities. According to the Associated Press, mediators have made progress in extending the ceasefire, with both sides agreeing in principle to prolong negotiations focused on Tehran’s nuclear program, the Strait of Hormuz, and war compensation. US President Donald Trump suggested a deal could be near, though uncertainty lingers after the US announced plans to deploy 10,000 more troops to the region soon. Meanwhile, the dollar remains near six-week lows, supporting bullion. Markets have also tempered expectations for tighter monetary policy, with the Federal Reserve adopting a cautious stance as it assesses inflation risks. Gold, typically an inflation hedge, has fallen 10% since the Iran conflict began, as higher interest rates curb demand for the non-yielding asset.