Gold prices held steady near $4,800 an ounce on Friday and were on track for a fourth straight weekly gain, as easing geopolitical tensions between the United States and Iran dampened inflation concerns and reduced expectations of further interest rate hikes.
The metal traded in a narrow range during early sessions, with investors weighing shifting signals around a potential ceasefire deal and its broader implications for energy prices, inflation, and monetary policy.
Sentiment in global markets has improved in recent days after U.S. President Donald Trump suggested Tehran had agreed to key terms of a possible deal, including commitments linked to its nuclear programme and steps toward reopening the Strait of Hormuz. Iranian officials have not confirmed the claims.
Despite the diplomatic optimism, the Strait of Hormuz remains effectively shut under a continuing security standoff, with maritime flows still heavily restricted. The disruption has kept energy markets volatile, even as risk premiums begin to ease.
Energy policy analysts have warned that restoring normal oil and gas flows through the region could take an extended period, with some estimates suggesting a full recovery may require up to two years, according to remarks attributed to International Energy Agency chief Fatih Birol.
Oil prices, however, have fallen sharply from recent highs as traders increasingly price in the possibility of a political resolution, easing inflationary pressures across broader markets.
Gold, which has rallied through the period of geopolitical uncertainty, is now set to rise about 1% for the week and remains roughly 17% above its March low, supported by safe-haven demand alongside shifting rate expectations.
Analysts say the current moves reflect a delicate balance: easing inflation expectations are supporting risk assets, while lingering uncertainty around energy supply continues to underpin demand for defensive holdings such as bullion.
For now, markets remain highly sensitive to developments in negotiations, with both energy and precious metals reacting sharply to each new signal from Washington and Tehran.
