Spot Gold held near a more than 1-week high on Thursday amid optimism the US and Iran may be moving closer to a peace deal. This has led to a drop in oil prices and eased concerns over elevated inflation.
Media reports stated that Washington and Tehran were working towards a one-page memorandum to put an end to the confrontation in the Gulf, while tricky issues such as Iran’s nuclear programme would be left for later.
“The optimism about a final deal between the U.S. and Iran has caused at least some short-term relief in gold, with lower oil prices, moderated inflation concerns, and shifted biases with regards to Fed actions later in the year,” Peter Grant, vice president and senior metals strategist at Zaner Metals, was quoted as saying by Reuters.
“I wouldn’t say we’re necessarily completely out of the woods. The market is going to continue to pivot on Middle East headlines.”
Brent prices held just above $100 per barrel.
Elevated energy costs have added to global inflation expectations and kept central bank policy makers wary of adopting a more dovish stance. In turn, the reduced probability of near-term interest rate cuts by central banks has weighed on non-interest-bearing Gold.
Investors now braced for the key US Non-Farm Payrolls report, which may provide fresh clues on the Fed’s monetary policy path. Indications of a cooling labor market could revive the case for interest rate cuts.
Spot Gold was last up 0.91% on the day to trade at $4,733.79 per troy ounce.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
