Gold rose on Friday and was headed for a weekly gain on easing fears of inflation and higher interest rates, as investors remained optimistic about a U.S.-Iran peace deal despite renewed attacks.
Spot gold was up 0.7 percent at US$4,719.85 (HK$36,814) per ounce as of 0218 GMT. Bullion has gained 2.3 percent so far this week.
U.S. gold futures for June delivery rose 0.4 percent to US$4,728.30.
The United States and Iran exchanged fire on Thursday in the most serious test yet of their month-long ceasefire. However, Iran said the situation returned to normal while the U.S. said it did not want to escalate.
"The comments that we've had from the Trump administration this morning that the ceasefire is holding and that there's still lingering optimism that a deal will get done between the U.S. and Iran — that's kind of supporting the gold market for now," said Kyle Rodda, a senior financial market analyst at Capital.com.
Gold prices have fallen more than 10 percent since the war began in late February, pressured by higher oil prices. Elevated crude oil prices can stoke inflation, increasing the likelihood of higher interest rates. While gold is seen as an inflation hedge, high interest rates tend to weigh on the non-yielding asset.
"We just wait for the next headline about whether the U.S. and Iran are getting close to agreeing on something. I think that there could be some choppy price action in the next 24 hours going into the end of the week," Rodda said.
Markets now await the monthly U.S. employment report due later in the day to assess how the Federal Reserve will move forward with monetary policy this year. Nonfarm payrolls likely increased by 62,000 jobs last month after rebounding by 178,000 in March, according to a Reuters survey of economists.
Spot silver rose 1.6 percent to US$79.74 per ounce, platinum gained 1.3 percent to US$2,048.08, and palladium was up 1.2 percent at US$1,498.62.
Reuters
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