Gold, silver and precious metals prices after positive signals from the US - Iran

Gold and many other precious metals surged in the trading session on May 6, as positive signals related to negotiations between the US and Iran pulled oil prices and the USD down, thereby supporting the precious metals to recover after the sell-off at the beginning of the week.

According to Reuters, gold prices rose more than 2% after US President Donald Trump said Washington could reach an agreement with Iran in the near future. Mr. Trump also informed that the US will temporarily suspend escort ships across the Strait of Hormuz, due to progress in negotiations towards a comprehensive agreement with Tehran.

At the same time, the Iranian Foreign Minister affirmed that his country only accepts a "fair and comprehensive agreement" in the negotiation process with the US to end the conflict in the Middle East.

Mr. Kelvin Wong - senior market analyst at OANDA - said that gold prices were supported when oil prices cooled down due to reduced geopolitical risk compensation.

According to Mr. Wong, the US confirmation of a fragile ceasefire between Iran and Israel is still being maintained, despite some recent clashes, which has caused oil prices to fall and created conditions for gold to recover.

However, this expert also warned that if tensions escalate again, the gold market may witness strong profit-taking activity from short-term speculators.

The weakening USD also contributed to supporting gold prices, as the precious metal became more attractive to investors holding other currencies.

Meanwhile, falling oil prices help ease inflation concerns somewhat. This is an important factor because high energy prices often increase expectations of maintaining interest rates at a higher level for longer, putting pressure on gold - a non-performing asset.

US economic data sends mixed signals, causing the precious metals market to fluctuate in both directions. The ISM service PMI in April fell to 53.6 points from 54 points last month, lower than forecast but still above the 50 point threshold - showing that the service sector continues to expand.

Meanwhile, the price index in the ISM report remains at the highest level since October 2022, showing that inflationary pressure has not cooled down significantly. The number of new JOLTS jobs in March is almost flat, while recruitment activity increased to the highest level since February 2024.

Experts believe that this makes the US Federal Reserve (FED) not have many reasons to cut interest rates soon.

The yield on 10-year US Treasury bonds slightly decreased to around 4.42%-4.43%, but is still significantly higher than the period before the Iranian conflict broke out.

In the opposite direction, the US stock market recovered strongly as oil prices cooled down. S&P 500 and Nasdaq indices simultaneously set new records, while the Dow Jones increased by 0.7%.

ANZ believes that risks related to economic growth, currency fluctuations, geopolitical tensions and the risk of a weakening stock market will continue to strengthen the safe-haven role and diversify the portfolio of gold in the coming time.

Investors are currently focusing on following the ADP jobs report released on May 7 and especially the US non-farm payroll data this weekend to assess the monetary policy outlook of the FED as well as the next trend of world gold prices.