BY COMFORT OGBONNA
Gold prices moved higher on Thursday, supported by a softer U.S. dollar and declining crude oil prices, as investors weighed renewed hopes for progress in easing tensions linked to the U.S.-Israeli conflict with Iran.
Spot gold climbed 0.8% to $4,468.84 per ounce as of 0559 GMT, while U.S. gold futures for August delivery rose 0.7% to $4,495.70. The gains reflected a combination of currency movements and shifting expectations around geopolitical risks and inflation pressures.
The U.S. dollar eased during the session, making dollar-denominated commodities like gold more attractive for international buyers. At the same time, lower oil prices reduced inflation concerns, easing pressure on interest rate expectations and indirectly supporting precious metals.
Market analysts noted that gold’s recent performance remains closely tied to movements in both oil and the dollar. When energy prices fall and the dollar weakens, gold tends to gain support as investors look for alternative stores of value.
“Gold’s gains are still very much at the mercy of oil and the dollar,” said Tim Waterer, chief market analyst at KCM Trade. He added that sustained upward momentum in gold would likely depend on continued positive developments in U.S.-Iran relations and broader geopolitical headlines.
Geopolitical developments helped shape sentiment in broader markets. Israel and Lebanon agreed to implement a ceasefire to end hostilities, according to the U.S. administration, raising hopes that tensions in the wider Middle East could ease and potentially pave the way for a broader diplomatic resolution involving Iran.
At the same time, the U.S. House of Representatives passed a resolution aimed at limiting President Donald Trump’s authority to continue military action against Iran, reflecting growing political concern over the ongoing conflict and its economic implications.
Oil prices declined in response to easing geopolitical risk, as markets reacted positively to signs of de-escalation. Since oil is a major driver of global inflation, lower prices have reduced fears of prolonged inflationary pressure, which in turn influences expectations for central bank policy.
Gold is often viewed as a hedge against inflation and uncertainty, but it typically struggles in environments where interest rates remain high. Higher rates increase the opportunity cost of holding non-yielding assets like gold, making monetary policy expectations a key factor in price direction.
New York Federal Reserve President John Williams said he does not expect inflationary pressures stemming from Middle East tensions to persist in the long term. He also indicated that there is currently no need to adjust U.S. monetary policy, reinforcing expectations that interest rates may remain elevated for some time.
Despite short-term volatility, some analysts remain optimistic about gold’s longer-term trajectory. “I don’t think we’ve seen the end of the bull run,” said Matt Simpson, senior analyst at StoneX. He suggested that while markets may experience choppy trading conditions, gold could still trend higher toward the $5,000 level over the medium term.
Other precious metals also posted gains during the session. Spot silver rose 0.6% to $73.13 per ounce, platinum increased 0.9% to $1,875.70, and palladium added 0.3% to $1,306.
Overall, the precious metals market remains highly sensitive to shifts in geopolitical risk, currency movements, and interest rate expectations, with investors closely watching developments in the Middle East and signals from the U.S. Federal Reserve for direction in the weeks ahead.
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