Gold Holds Gains on Middle East Peace Prospects

Gold traded near $4,700 an ounce on Thursday after rising roughly 3% in the previous session, as hopes for a US-Iran agreement triggered a sharp decline in oil prices and helped ease inflation worries. Reports indicated that the US had sent a one-page memorandum of understanding through Pakistani mediators aimed at formally ending the conflict and potentially allowing the gradual reopening of the Strait of Hormuz. Tehran is expected to respond in the coming days after confirming it was reviewing a US peace proposal, while more comprehensive negotiations over Iran’s nuclear program are reportedly expected later. Oil prices tumbled, easing concerns over inflationary pressures and reducing expectations that central banks would need to maintain restrictive policies for longer. Still, Federal Reserve Bank of Chicago President Austan Goolsbee warned that inflation has not continued to cool toward the US central bank’s 2% target and has instead accelerated since the outbreak of the war.

Gold climbed above $4,700 an ounce on Wednesday, rising for a second consecutive session as signs of de-escalation in the Middle East pushed oil prices lower, easing inflation concerns. According to Axios, the White House is nearing a one-page Memorandum of Understanding with Iran to end the conflict and begin nuclear negotiations, the closest the parties have been to a deal since the conflict started. The proposal would require Iran to accept enhanced UN inspections, halt nuclear enrichment for 12–15 years, potentially transfer highly enriched uranium abroad, and limit underground facilities. In return, the US would gradually lift sanctions and unfreeze billions in Iranian assets. Earlier, US President Donald Trump paused escalation plans, citing progress in talks. Gold has faced significant selling pressure since the war began, as soaring energy costs fueled inflation fears and reinforced expectations that central banks might keep interest rates elevated or tighten policy further.

Gold climbed above $4,600 an ounce on Wednesday, advancing for a second straight session as signs of de-escalation in the Middle East pushed oil prices lower, helping to alleviate inflation concerns. Defense Secretary Hegseth said the ceasefire established nearly a month ago remains intact, while Secretary of State Rubio confirmed that offensive operations have ended as Washington pivots toward safeguarding shipping routes in the Strait of Hormuz. President Trump also announced a temporary pause in a US-led effort to assist stranded vessels in exiting the strait, allowing time to gauge whether a deal with Iran to end the conflict can be reached, although the blockade on ships traveling to and from Iranian ports will stay in place. Gold has faced significant selling pressure since the onset of the war, as soaring energy costs fueled inflation fears and reinforced expectations that central banks may keep interest rates elevated for longer or potentially tighten further.