Gold steadied after three days of gains, with US President Donald Trump saying he is “optimistic” about a deal with Iran despite the continued closure of the Strait of Hormuz.
Bullion was near $4,765 an ounce in early trading, having risen 2.5% over the previous three sessions. With key issues around the war in Iran unresolved, attention is turning to talks scheduled for Saturday in Islamabad, where a US delegation led by Vice President JD Vance is due to meet Iranian officials. Trump also threatened Tehran over charging fees in Hormuz as Israeli strikes in Lebanon jeopardized a fragile ceasefire.
Oil rose for a second day but is on track for its biggest weekly loss since June, while stocks gained on Thursday and a gauge of the dollar fell, supporting gold that’s priced in the US currency. Since the war began, however, bullion has fallen nearly 10% as its haven appeal has been weakened by some investors’ need to cover losses elsewhere.
The six-week war has also raised inflationary risks, making it more likely that central banks will delay cutting interest rates or even hike them. This is a headwind for non-yielding gold, which benefits when borrowing costs are lower.
US consumer spending barely rose in February against a backdrop of persistent inflation even before the war began, a report from the Bureau of Economic Analysis showed on Thursday. A more updated picture of inflation is due later Friday with the March consumer price index report from the Bureau of Labor Statistics.
Spot gold was little changed at $4,766.17 an ounce at 6:21 a.m. Singapore time. Silver was steady at $75.35, with platinum and palladium also flat. The Bloomberg Dollar Spot Index ended the previous session down 0.2%.
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