Hope for a ceasefire between the United States and Iran is starting to ease global inflationary pressures and breathe new life into the precious metals market.
Gold managed to maintain its strengthening momentum after reports emerged that Washington and Tehran reached a preliminary agreement to extend the ceasefire for 60 days.
The diplomatic move is aimed at ending the crisis in the Middle East that previously sparked fears of hyperinflation.
The yellow metal was trading around $4,495 an ounce after recording a one percent increase in the previous trading session. Despite reaching a two-month low due to air strikes, gold rebounded as the light of negotiations began to shine again.
Awaiting Final Approval from the White House
The interim agreement is now only awaiting final approval from President Donald Trump to begin further discussions on Tehran's nuclear program. The previous closure of the Strait of Hormuz has sent an inflationary shock that forced central banks to consider higher interest rates for a longer period.
The latest economic data showed US consumer spending rose in April with the annual inflation rate hitting its highest level since 2023.
As gold does not yield interest, its value is often pressured when central banks act to raise borrowing costs to curb rising commodity prices.
While gold remained subdued, silver recorded a slight increase of 0.2 percent while platinum and palladium showed little change.
The US dollar index was also reported to be flat after experiencing a depreciation in value in the previous session, giving commodity assets some breathing room.
