Precise Investors Editorial Team
Spot gold gained 0.7% to $4,821.44 per ounce
Gold prices rose on Thursday, supported by a weaker dollar, while investors weighed growing optimism over a potential U.S.-Iran deal to end the war that has pushed up energy prices and fuelled fears of higher inflation.
Spot gold gained 0.7% to $4,821.44 per ounce by 0301 GMT. U.S. gold futures for June delivery added 0.4% to $4,844.40.
The U.S. dollar hovered near its lowest level in six weeks, making dollar-denominated commodities including bullion more affordable for holders of other currencies, while benchmark 10-year U.S. Treasury yields eased 0.1%.
The primary driver for gains in gold is the optimism about a U.S.-Iran ceasefire, said Kelvin Wong, a senior market analyst at OANDA.
If we start to see a break above $4,900, further potential upside cannot be ruled out towards the next intermediate resistance zone, which is at the psychological level of $5,000, Wong said.
The U.S. expressed optimism on Wednesday about reaching a deal to end the war with Iran, while warning of increasing economic pressure against Iran if it rejects ceasefire.
The U.S. president said he believes the war he launched with Israel in late February is nearly over, even as a shipping blockade he announced came into effect and traffic through the Strait of Hormuz remained well below normal levels.
Spot gold prices have dropped more than 8% since the Iran war began in late February amid concerns that elevated energy prices could feed into inflation and keep global interest rates higher.
While gold is considered a hedge against inflation, higher interest rates weigh on the non-yielding metal’s demand.
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