Gold prices moved modestly higher on Friday and remained on track for a weekly gain as investors weighed hopes for a potential peace agreement between the United States and Iran against ongoing concerns surrounding the fragile ceasefire. Traders also stayed cautious ahead of the release of key U.S. labor market figures later in the day.
Spot gold climbed 0.8% to $4,723.52 per ounce by 01:35 ET (05:35 GMT), while U.S. Gold Futures advanced 0.5% to $4,731.96.
The precious metal has risen nearly 2% this week after rebounding from one-month lows reached earlier in May.
Hormuz tensions remain in focus despite ceasefire comments
Financial markets continued to monitor developments in the Middle East after U.S. and Iranian forces exchanged fire near the Strait of Hormuz on Thursday, marking the most significant violation so far of the ceasefire established a month ago.
Iran later stated that conditions in the affected coastal regions had stabilized, while U.S. President Donald Trump told ABC News that the ceasefire remained active.
Although gold is traditionally considered a safe-haven asset, bullion also found support from easing inflation concerns after expectations for a broader diplomatic agreement helped pull oil prices back from recent highs.
Lower inflation expectations could improve the outlook for gold by reducing fears that interest rates may remain elevated for an extended period.
A modest weakening in the U.S. dollar earlier in the week also provided additional support for bullion prices.
The U.S. Dollar Index was trading down 0.1% during Asian market hours after finishing largely unchanged following a volatile previous session.
Investors await U.S. payrolls report for Fed policy signals
Traders largely avoided taking aggressive positions ahead of the upcoming U.S. nonfarm payrolls report, which could influence expectations regarding future Federal Reserve policy decisions.
Economists currently expect payroll growth of around 65,000 jobs, while the unemployment rate is forecast to remain steady at 4.3%. A weaker-than-anticipated report could strengthen expectations for future Fed rate cuts and provide further support for non-yielding assets such as gold.
Gold prices have declined more than 10% since the Iran conflict intensified in late February, pressured by rising oil prices that fueled inflation concerns and increased expectations for higher interest rates.
Other precious metals and copper prices rise
Among other precious metals, spot silver gained 1.9% to $79.95 per ounce, while platinum rose 1.7% to $2,060.30 per ounce.
Benchmark Copper Futures on the London Metal Exchange increased 0.4% to $13,396.33 per ton, while U.S. Copper Futures climbed 1.4% to $6.21 per pound.