Gold prices rose in Friday's trading session and headed for a week of gains as concerns about inflation and interest rates cooled down, in the context that the market still maintains expectations of a peace agreement between the US and Iran even though military tensions have not completely ended.
As of 3:27 PM Vietnam time, spot gold prices increased by 0.44% to 4,720.24 USD/ounce. Over the week, this precious metal has increased by about 2%. US gold futures for June delivery increased by 0.1% to 4,716.50 USD/ounce.
The US and Iran exchanged gunfire on Thursday, marking the most serious test since the two sides reached a month-long ceasefire. However, Iran said the situation has returned to normal, while the US side affirmed that it does not want to escalate tensions.
Commentary from the Trump administration this morning shows that the ceasefire is still being maintained and the market still expects that the US and Iran will reach an agreement. That is supporting the gold market at the moment," said Kyle Rodda, senior financial market analyst at Capital.com.
Gold prices have fallen more than 10% since the conflict broke out at the end of February due to a sharp increase in oil prices. High crude oil prices can boost inflation, thereby increasing the possibility of interest rates remaining high. Although gold is often seen as an inflation hedging tool, high interest rates put pressure on this non-performing asset.
The market is currently continuing to wait for new information related to the possibility of the US and Iran getting closer to an agreement. Gold prices may continue to fluctuate in the next 24 hours before the end of the trading week," Rodda added.
Investors are currently focusing on the US monthly jobs report expected to be released this day to assess the next monetary policy orientation of the Fed this year.
According to a Reuters survey of economists, the US non-farm payroll may increase by 62,000 jobs last month after recovering 178,000 jobs in March.
On other precious metals markets, spot silver prices increased by 1.5% to 79.68 USD/ounce, platinum increased by 1.2% to 2,045.38 USD/ounce, and palladium increased by 1.4% to 1,500.91 USD/ounce.
