FX.co ★ Gold Holds Gains on Iran Deal Prospects

Gold held above $4,200 an ounce on Friday, extending gains after surging more than 3% in the previous session. The move came as growing optimism over an imminent peace agreement between the US and Iran helped ease worries about stubborn inflation and further interest rate hikes. President Donald Trump said a deal with Iran could be reached as early as this weekend, after he postponed planned military strikes and warned that the US could instead target the country’s oil infrastructure. Iran’s semi-official Fars news agency reported that Tehran was likely to accept the agreement, though no final text has yet been approved.

At the same time, the European Central Bank on Thursday raised interest rates for the first time since 2023 and upgraded its inflation forecasts for 2026 and 2027. In the US, data showed producer prices rose 6.5% year-on-year in May, underscoring the inflationary impact of the Middle East energy shock and reinforcing expectations that the Federal Reserve will deliver a rate hike this year.