TLDR
- Gold climbed beyond $4,700 per ounce, reaching its highest point in two weeks during Thursday trading
- Diplomatic progress between Washington and Tehran drove oil prices downward, reducing inflation concerns
- The US dollar’s decline made precious metals more affordable for international purchasers
- Tehran is evaluating a 14-point American peace proposal, with negotiations scheduled in Pakistan
- Silver surged more than 5%, while platinum and palladium posted gains as well
The price of gold has climbed beyond $4,700 per ounce following three consecutive sessions of gains on Thursday. The rally follows increasing diplomatic momentum between Washington and Tehran that could lead to the reopening of the Strait of Hormuz.
By mid-morning in New York, spot gold had advanced 1.2% to reach $4,747.26 per ounce. June gold futures rose 1.3% to settle at $4,753.71.
During Wednesday’s session, gold recorded a gain exceeding 3% — marking its largest single-day advance since the final days of March. This performance pushed the precious metal to its strongest position in fourteen days.
Silver experienced robust momentum as well. The white metal advanced over 5% on Thursday following a 6.2% surge the previous day. Both platinum and palladium registered upward movement.
Gold had declined approximately 10% following the outbreak of hostilities with Iran in late February. The blockade of the Strait of Hormuz — a critical maritime corridor responsible for roughly one-fifth of global oil transport — caused energy costs to spike dramatically, intensifying worries about persistent inflation.
Elevated inflation generally prompts central banks to raise interest rates. This environment typically pressures gold, which generates no yield. Therefore, when inflation anxieties diminish, precious metals tend to gain favor.
Diplomatic Framework Reduces Inflation Worries
Washington has presented a single-page, 14-point framework designed to resume diplomatic engagement with Tehran. The Wall Street Journal reports that discussions are scheduled to commence next week in Pakistan.
Iranian Foreign Minister Abbas Araghchi conducted meetings with his Pakistani counterpart to address the current situation. Both officials emphasized the importance of maintaining dialogue and diplomatic channels to prevent further tensions.
Tehran was anticipated to deliver its response to the American proposal through Pakistani intermediaries within two days of Wednesday. CNN indicated that this response was projected to arrive by Thursday.
President Trump told reporters at the White House on Wednesday that conversations with Tehran had progressed “very good” during the previous 24 hours. He indicated that America had “won” the conflict.
Washington has also announced it secured passage through the Strait of Hormuz, according to statements from US Central Command.
Currency Weakness Bolsters Precious Metal Demand
Oil prices continued their descent on Thursday, although they remain elevated compared to pre-conflict levels. Declining energy costs have alleviated concerns that inflation will persist at elevated levels.
US Treasury yields retreated in response. This development enhanced gold’s appeal among investors seeking wealth preservation.
The US dollar dropped to pre-conflict levels. Because gold trades in dollars, currency weakness makes the metal more affordable for international buyers, which generally increases demand.
The Bloomberg Dollar Spot Index declined 0.2% on Thursday after sliding 0.6% during the prior session.
ING analysts noted that a potential decrease in energy prices “gives the Fed more room to cut rates, which is positive for gold.”
TD Securities strategist Ryan McKay indicated that gold must maintain support above $4,700 to sustain its bullish trajectory, with the subsequent target level positioned at $4,900.
Investors are now focused on Friday’s US non-farm payrolls data for additional insight into the Federal Reserve’s potential interest rate path.
