Gold Ends Losing Streak as US-Iran Deal Hopes Rise

Gold and silver futures settled higher on Thursday, snapping a multi-day losing streak as reports emerged of a potential US-Iran deal. The Axios report, citing unnamed sources, indicated that an agreement had been reached pending approval from President Trump. The news boosted risk sentiment across markets, weighing on the US dollar and providing support for precious metals. This inverse correlation between the dollar index (DXY) and gold is a well-established mechanism: a weaker dollar makes gold cheaper for holders of other currencies, boosting demand. Additionally, the real US 10-year Treasury yield, which often moves inversely to gold, remained subdued, further supporting the rally. Central banks globally have been net buyers of gold since 2022, diversifying reserves away from the dollar, and this structural demand provides a floor under prices. ETF flows into funds like GLD and IAU have been mixed, but any sustained dollar weakness could reignite investor interest.

For gold traders, the development is significant because a US-Iran deal could reduce geopolitical tensions, traditionally a driver of safe-haven demand. However, the immediate market reaction was positive for gold as the dollar weakened on the prospect of reduced tensions. Lower geopolitical risk can sometimes dampen gold's safe-haven appeal, but the dollar's decline and improved risk appetite can offset that effect. The COMEX-LBMA spread, which reflects arbitrage between futures and physical markets, has remained tight, indicating orderly conditions. Jewelry demand, which accounts for about half of global gold consumption, tends to benefit from lower prices, while investment demand via bars and coins is more sensitive to macro factors. Traders can check NowPrice's gold page for real-time pricing and monitor how the dollar index and Treasury yields react.

Looking ahead, traders will watch for official confirmation from the White House or Iranian authorities. Any delays or breakdowns in negotiations could reverse the move. Additionally, upcoming US economic data, including personal consumption expenditures (PCE) inflation figures, will be key for near-term gold direction as they influence Federal Reserve policy expectations. A higher PCE reading could strengthen the dollar and pressure gold, while a softer print would reinforce rate-cut bets. The interplay between real yields, the dollar, and geopolitical headlines will determine whether gold can sustain its recovery or resume its downtrend.