Gold Rises as Dollar Falls After Trump Claims Iran Progress
Gold prices rose on Wednesday after US President Donald Trump hailed “great progress” toward a final agreement with Iran, triggering a weaker dollar and supporting demand for the precious metal. Spot gold rose as much as 2.3% to trade above $4,660 per ounce.
Gold’s gains coincided with a weaker dollar, with the dollar indicator falling 0.5%, making gold relatively cheaper for buyers outside the US. Trump also said he would temporarily halt US-led efforts to help stranded ships dislodge them from the Strait of Hormuz to assess whether a deal can be finalized.
On the geopolitical front, US Defense Secretary Pete Hegseth said the ceasefire that began less than a month ago was still in effect, while Secretary of State Marco Rubio said offensive operations had ended as Washington shifted its focus to protecting shipping in the strait. Iranian Foreign Minister Abbas Araghchi also stated that talks were “making progress,” although reports of a cargo ship being hit by an unidentified projectile the day after the ship clash in Hormuz suggested tensions had not yet fully subsided.
Despite the support of a weaker dollar, gold remains clouded by short-term headwinds from interest rate expectations. The path to a deal that truly reopens the straits remains unclear, while inflation concerns have led bond markets to increase bets that the next central bank policy move could be a rate hike rather than a rate cut—a situation that typically weighs on gold because it offers no yield. Bullion remains down more than 12% since the war began in late February.
The market's next focus is on the US jobs report, which could test the assumption that the labor market remains stable, allowing inflation risks to return to the forefront. In a note from MKS PAMP SA, Nicky Shiels believes gold is entering the summer with a "structural positioning paradox": nominal inflows remain high, but contract and ounce positions remain light, so a move to new highs is seen as requiring broader institutional participation. At 2:00 p.m. in Singapore, spot gold was up 2.3% at $4,662.70, while silver was up 4.2% at $75.91; platinum and palladium also gained.
5 key points:
- Spot gold rose 2.3% to above $4,660/oz after Trump claimed "major progress" with Iran.
- The dollar index fell 0.5%, supporting gold prices via the exchange rate channel.
- The US said the ceasefire is still in effect and offensive operations are over, but the ship incident in Hormuz indicates the risks are not gone.
- Interest rate expectations remain a burden: the bond market is raising bets that the next step could be a rate hike.
- Ahead of the US jobs data, gold positioning is considered "light" despite high capital inflows; silver strengthened more sharply. (gn)
Source: Newsmaker.id
