Gold Rises on Ceasefire Hopes but Heads for Monthly Drop

Gold increased 2% to 4585.22 USD/t.oz

Gold climbed for a second straight session to $4,580 an ounce on Friday after reports that the US and Iran may extend their ceasefire. However, prices remained on track for a 0.8% monthly decline, pressured by inflation concerns and expectations of prolonged higher interest rates. Negotiations to end the three-month war continued, with reports of a tentative 60-day ceasefire extension to allow formal talks, though President Trump has yet to approve the agreement. Despite potential progress, bullion faced headwinds as disruptions to shipping and energy infrastructure could keep oil prices elevated, maintaining a cautious stance from the Federal Reserve. US inflation data this month showed the fastest rise in three years in April, reinforcing expectations that the Fed will keep rates unchanged well into 2027. Elsewhere, gold demand in India stayed weak due to high prices and import duties, while premiums in top consumer China narrowed amid cautious market sentiment.

Gold steadied near $4,500 an ounce on Friday after recovering in the previous session, as reports of a preliminary agreement between the US and Iran eased concerns over inflation and interest rates. Washington and Tehran are reportedly set to extend their ceasefire by 60 days and begin talks over Iran’s nuclear program, while also considering unrestricted shipping through the Strait of Hormuz. Still, the report noted that President Donald Trump has not yet approved the proposed terms, while Vice President JD Vance said it remains too early to determine whether or when a deal with Iran could be finalized. Gold has faced strong selling pressure since late February as the surge in oil prices triggered by the Iran conflict fueled inflation worries and strengthened expectations for tighter monetary policy. Meanwhile, the US Federal Reserve is widely expected to keep interest rates unchanged this year, although policymakers continue to warn about persistent inflation risks.