XAU/USD rises 0.7% as WTI crude falls 1.6% to a five-week low near $86.30 amid easing Middle East tensions.
Gold prices climbed 0.7% to near $4,530 in European trading Friday, extending Thursday’s recovery as oil prices dropped. WTI crude fell 1.6% to a five-week low of $86.30 after reports of a potential US-Iran agreement easing energy supply concerns.
The precious metal had underperformed in recent months due to higher oil-driven inflation, which reduced expectations for Federal Reserve rate cuts. Markets had priced in a 62% chance of rate hikes by December a week ago, but that probability has since fallen to 44%.
A 60-day US-Iran memorandum of understanding, if approved by President Trump, could remove blockades on Iranian ports and ensure unrestricted energy flow through the Strait of Hormuz, a key global oil chokepoint.