Gold prices moved higher for a third consecutive trading day on Thursday, supported by growing expectations of a potential peace agreement between the United States and Iran, while a softer U.S. dollar also boosted demand for the precious metal.
Spot gold gained 1% to $4,736.61 an ounce by 02:55 ET (06:55 GMT). June U.S. gold futures rose 1.1% to $4,746.86.
The precious metal had already surged more than 3% on Wednesday, marking its strongest daily advance since late March, after oil prices dropped sharply amid hopes of easing tensions in the Middle East.
Lower oil prices and diplomatic progress support bullion
Investor sentiment improved after Axios reported that the White House was close to reaching an agreement with Iran on a memorandum of understanding aimed at ending the conflict.
Iran stated that it was reviewing the proposal, while U.S. President Donald Trump said he believed Tehran was seeking a deal.
Oil prices had fallen more than 7% on Wednesday following reports of progress in negotiations, although crude markets stabilised on Thursday as traders waited for further developments surrounding the talks.
The prospect of lower energy costs helped ease concerns over a prolonged inflation shock, pushing U.S. Treasury yields and the dollar lower while increasing demand for non-yielding assets such as gold.
“The potential easing in energy prices gives the Fed more room to cut rates, which is positive for gold,” ING analysts said in a note.
Markets focus on upcoming U.S. employment data
The U.S. Dollar Index slipped 0.1% during Asian trading hours after declining 0.4% overnight, hovering close to levels seen before the outbreak of the conflict.
Attention is now turning to Friday’s U.S. non-farm payrolls report, which investors hope will provide further guidance on the Federal Reserve’s interest-rate outlook after recent comments from Fed officials highlighted concerns that the Middle East conflict could fuel inflation and disrupt supply chains.
Silver and platinum also advance
Among other precious metals, silver prices climbed 1.9% to $78.79 per ounce, while platinum added 0.4% to $2,072.55 per ounce.
Meanwhile, benchmark copper futures on the London Metal Exchange were broadly unchanged at $13,391.33 per ton, while U.S. copper futures traded little changed at $6.20 per pound.