Gold prices inched higher on Friday, recovering from earlier losses of more than 1 percent, as renewed optimism over potential negotiations between the United States and Iran eased inflation concerns and supported market sentiment.
Spot gold rose to $4,627.63 an ounce by 5:50 p.m. GMT after touching a session low of $4,559.48.
Despite the rebound, the metal remains on track for a weekly decline of around 1.7 percent. Meanwhile, US gold futures for June delivery climbed 0.4 percent to $4,649.60.
Market analysts attributed the recovery to positive developments surrounding Iran, which reportedly submitted new proposals for negotiations with Washington.
The news also pushed the US dollar lower against a basket of major currencies, making gold more affordable for international investors.
Experts noted that any progress toward ending the conflict could influence US monetary policy, potentially paving the way for interest rate cuts.
Lower rates typically weaken the dollar and enhance gold’s appeal as a non-yielding asset.
However, broader economic pressures continue to weigh on the market. Rising fuel costs and concerns about slowing global growth have raised expectations that central banks may keep interest rates elevated for longer, limiting gold’s upside.
The Federal Reserve kept interest rates unchanged this week, adding to uncertainty in financial markets. Notably, gold has declined since the onset of the Iran conflict in late February, despite its traditional role as a safe-haven asset.
In other precious metals, silver jumped 3 percent to $75.91 an ounce, while platinum gained 0.3 percent to $1,992.05 and palladium rose 0.6 percent to $1,532.79.
