Gold climbed above $4,500 per ounce on Thursday as growing optimism over a Middle East resolution weakened the dollar and eased oil prices, tempering concerns about inflation and further interest rate hikes. A ceasefire agreement between Israel and Lebanon, aimed at ending hostilities, has raised hopes for a broader deal to de-escalate tensions between the United States, Israel, and Iran. In a further sign of wariness over military escalation, the Republican-controlled US House of Representatives passed a resolution seeking to block President Donald Trump from continuing military action against Iran. However, uncertainty over the conflict’s ultimate resolution persists, and regional tensions remain elevated.
Since the war began in late February, gold has fallen roughly 16%, as surging oil prices have intensified inflation worries and increased expectations of higher interest rates. Looking ahead, consultancy Metals Focus projects that gold will resume its bull run in the second half of the year, but it forecasts a 2% decline in demand in 2026, largely driven by double-digit drops in jewelry consumption and central bank purchases.