Gold extended gains on Thursday, rising above $4,700 an ounce, as easing oil prices driven by renewed hopes of a U.S.-Iran diplomatic breakthrough softened inflation concerns and supported demand for the safe-haven metal.
Spot gold climbed to $4,734.64 per ounce on May 7, 2026, up 0.92% from the previous session, marking a continuation of recent upward momentum as markets reassessed geopolitical risk premiums linked to the Middle East conflict.
The move followed reports that Washington had transmitted a one-page memorandum of understanding via Pakistani intermediaries aimed at ending hostilities and enabling a phased reopening of the Strait of Hormuz, a key global energy transit route. Iran is expected to respond in the coming days after confirming it was reviewing the proposal, while broader nuclear negotiations are expected later.
Oil prices fell sharply on the developments, easing fears of prolonged supply disruptions and reducing near-term inflation expectations. The decline in energy costs has been a key driver of gold’s latest advance, as softer inflation pressure reduces the likelihood of prolonged restrictive monetary policy globally.
However, policy signals remain cautious. Federal Reserve Bank of Chicago President Austan Goolsbee warned that inflation has not continued to move toward the U.S. central bank’s 2% target, noting that price pressures have instead accelerated since the outbreak of the conflict.
Despite short-term volatility, gold remains strongly higher on a longer horizon. Prices are up about 0.29% over the past month and approximately 42.77% year-on-year, reflecting sustained demand for bullion amid persistent geopolitical uncertainty and shifting interest rate expectations.
Markets continue to balance two competing forces: optimism around potential de-escalation in the Middle East, and ongoing concerns that inflation may remain sticky even as energy prices fluctuate.
