Gold rises as Trump touts progress with Iran and dollar falls

Gold extended gains after US President Donald Trump touted progress on a final agreement with Iran, reducing inflationary pressure and sending the dollar lower.

Bullion rose as much as 1.6% to near $4 630 an ounce, after moving 0.8% higher on Tuesday. A gauge of the dollar declined 0.3%, making gold cheaper for many buyers. Trump in a social media post said “great progress” has been made with Iran and that he would pause a US-led effort to help stranded ships exit the Strait of Hormuz to see whether or not an agreement can be finalised.

US Defense Secretary Pete Hegseth said the truce that began just under a month ago was holding, while Secretary of State Marco Rubio said that offensive operations are over as Washington shifts to protecting shipping in the strait. Iranian Foreign Minister Abbas Araghchi said talks were “making progress.”

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While the US downplayed the prospect of a return to active war, reports a cargo vessel was hit by an unknown projectile the day after clashes involving ships in the Strait of Hormuz signal a continued simmering of tensions.

With the pathway to a deal that reopens the strait remaining opaque, gold remains under near-term pressure as inflationary concerns raise expectations for Federal Reserve rate hikes, which would weigh on non-yielding bullion. Bond traders are boosting wagers that the central bank’s next policy move could be an increase rather than a cut. Bullion has fallen more than 12% since the war began in late February.

Expectations for a hike are gaining traction ahead of the US employment report, which could show conditions in the labor market are stabilizing, allowing inflation risks to take center stage among investor concerns.

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Precious metals are entering summer with a “structural positioning paradox,” Nicky Shiels, head of research and metals strategy at trader MKS PAMP SA, said in a note. The notional amount of money invested in gold remains crowded, but positioning remains light in terms of contracts and ounces.

“The medium-term bull case on debasement, supply chain fragmentation, and monetary order breakdown remains intact,” she said, “but the near-term path to new highs requires generalist institutional capital to step in and fill a vacuum that seasonal patterns and exhausted retail cannot.”

Spot gold rose 1.5% to $4 627.32 an ounce as of 9:47 a.m. in Singapore. Silver was 2.9% higher at $74.98. Platinum and palladium advanced.

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