Gold (XAU/USD) maintained a positive bias for the third consecutive day, trading steadily above the $4,700 mark during the Asian session on Thursday, just below a one-and-a-half-week high set the previous day [1]. The precious metal's upside was supported by a broadly weaker US Dollar and fading expectations of a hawkish US Federal Reserve, both of which tend to benefit non-yielding assets like gold [1]. However, market participants showed caution, awaiting further clarity on a potential US-Iran peace deal before making new bets [1].
US President Donald Trump expressed optimism on Wednesday, stating that negotiations with Iran had made progress in the past 24 hours and that an agreement was 'very possible.' Axios reported that the US and Iran were close to finalizing a deal, but Iran's state-linked media contradicted this, citing the Iranian Students' News Agency, which said the US proposal included provisions Tehran had recently rejected [1]. The BBC added that Iran is reviewing a one-page memorandum of understanding that could gradually reopen the Strait of Hormuz and lift the US blockade on Iranian ports. Trump also warned that Iran would face more intense bombing if it did not agree to a peace deal. These conflicting reports and ongoing disagreements over Iran's nuclear program have contributed to market uncertainty and acted as a headwind for gold [1].
On the economic front, the US ADP report released Wednesday showed private-sector employment grew by 109,000 in April, up from a downwardly revised 61,000 in the previous month, indicating continued, though uneven, strength in the US labor market [1]. The CME FedWatch Tool indicated that traders are still pricing in the possibility of a Fed rate hike by the end of the year, which has helped limit further losses for the USD and capped gold's gains [1].
Looking ahead, traders are focused on upcoming US Weekly Initial Jobless Claims data and speeches from influential FOMC members, which could provide further market impetus. The closely-watched US Nonfarm Payrolls (NFP) report, due Friday, remains a key event, while developments in the Middle East crisis are expected to continue driving volatility in global financial markets and influencing gold's next directional move [1].
CONCLUSION
Gold prices remain supported above $4,700 amid a weaker USD and uncertainty surrounding US-Iran negotiations. While economic data and Fed expectations are capping further gains, upcoming US labor reports and geopolitical developments are likely to determine gold's next move.