Gold Jumps 1.7% as Middle East Peace Talks Cool Dollar and Oil

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Gold Jumps 1.7% as Middle East Peace Talks Cool Dollar and Oil

A potential US-Iran deal is shifting inflation fears, and gold is the first to respond.

Peace optimism is moving markets. As ceasefire talks gain traction across the Middle East, the dollar slipped, oil fell, and gold climbed sharply on Thursday.

KEY DETAILS

Spot gold rose 1.7% to $4,506.19 per ounce, while August futures gained 1.5% to $4,533.60. The rally came after the Trump administration confirmed Israel and Lebanon had agreed to implement a ceasefire. Separately, the Republican-led House passed a resolution to limit Trump’s war powers against Iran, fueling hopes of a broader diplomatic resolution.

Gold had dropped roughly 16% since the Iran conflict began in late February, pressured by rising oil prices and inflation fears that strengthened the case for higher interest rates.

MARKET REACTION

Oil prices fell on the ceasefire news. The dollar eased, making dollar-priced gold cheaper for international buyers. Silver rose 2.4% to $74.44, platinum gained 2.1% to $1,897.60, and palladium added 1.8% to $1,325.14.

WHY IT MATTERS FOR TRADERS

Lower oil prices reduce inflation pressure, which reduces the urgency for rate hikes, and that’s good for gold. Cooling geopolitical tensions and a weaker dollar could help gold extend its recovery. That said, if rates stay elevated, gold faces real headwinds.

Metals Focus sees gold resuming its bull run in H2 2026, but projects total demand falling 2% this year on weak jewelry sales and lower central bank buying.

WHAT TO WATCH

Friday’s US nonfarm payrolls report for May will be the next major signal for Fed policy direction, and gold’s next move.

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