XAU/USD holds gains after a 3% rally as traders balance geopolitical optimism against hawkish Fed expectations.
Gold (XAU/USD) trades flat around $4,200 on Friday, recovering from a seven-month low of $4,023 after reports of a potential US-Iran peace deal lifted market sentiment. The precious metal rallied over 3% as the USD and oil prices retreated following President Trump’s announcement of canceled military strikes and a possible agreement by this weekend.
Traders remain cautious as Iran’s final approval of the deal remains uncertain. Meanwhile, this week’s US inflation data, with CPI at 4.2% YoY and PPI at 6.5% YoY, reinforced expectations of prolonged higher Fed interest rates, limiting gold’s upside.
A memorandum of understanding between the US and Iran could be signed as soon as Sunday, though bullion struggles to extend gains amid mixed signals.