Spot Gold was mostly steady on Friday and was on course for a fourth consecutive weekly gain amid optimism about a potential US-Iran peace deal.
US President Donald Trump said the next round of talks between the United States and Iran might take place over the weekend.
In addition, a 10-day truce between Israel and Lebanon has raised hopes for broader peace.
“Investors are now watching closely for concrete progress in U.S.-Iran negotiations. Any progress or extension of the current fragile ceasefire could further calm oil markets and inflation fears, potentially unlocking more upside for gold,” Tim Waterer, chief market analyst at KCM Trade, was quoted as saying by Reuters.
Optimism over diplomatic efforts to prolong the US-Iran ceasefire has been a central factor behind the recent softening of the US Dollar, which was on course for a second weekly loss.
A softer US Dollar makes dollar-priced Gold more appealing to international investors holding other currencies.
On the data front, US producer price figures released this week eased concerns over the inflationary impact of the war-driven surge in energy prices and tempered hawkish Fed expectations.
Markets are now pricing in a 27% chance of a 25 basis point Fed rate cut by year-end, compared to about 13% last week.
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