Gold Prices Hold Firm as Iran Tensions and Dollar Swings Drive Safe-Haven Demand

Gold prices edged higher on Thursday as investors closely monitored developments surrounding potential U.S.-Iran peace negotiations and renewed uncertainty in the Strait of Hormuz. Spot gold rose 0.3% to $4,705 per ounce, while gold futures gained 0.4%, recovering slightly after retreating from recent two-week highs.

The precious metal initially surged after reports suggested progress toward a possible diplomatic agreement between Washington and Tehran. Optimism over easing Middle East tensions pushed oil prices lower, helping gold record its biggest daily jump since March. However, investor sentiment shifted after conflicting statements from Iranian officials created doubts about how quickly a peace agreement could materialize.

According to reports, the United States and Iran are discussing a new framework aimed at restarting negotiations involving nuclear policies, sanctions relief, and regional stability. At the same time, Iran introduced stricter procedures for oil tankers moving through the Strait of Hormuz, a critical route responsible for nearly 20% of global oil shipments. These developments continue to fuel concerns about global energy supply disruptions and inflation risks.

Analysts noted that gold’s recent price movements have been unusual compared to past geopolitical crises. Traditionally, rising tensions increase demand for gold as a safe-haven asset. This time, however, the market has also been influenced by fluctuating oil prices, central bank interest rate expectations, and U.S. dollar strength.

A softer U.S. dollar has recently supported bullion prices by making gold more affordable for international buyers. Meanwhile, fears of prolonged inflation and potential Federal Reserve rate hikes continue to shape investor behavior. Market experts believe uncertainty surrounding Middle East negotiations and global energy markets will likely keep gold prices volatile in the coming weeks.