Gold holds steady, set for fourth weekly gain on US-Iran deal optimism

Gold held broadly steady on Friday, poised for a fourth straight weekly rise, supported by optimism over a potential U.S.–Iran peace deal that cooled inflation fears and pushed the dollar lower. Spot gold was largely flat at $4,799.85 per ounce by 1156 GMT, up about 1% so far this week. U.S. gold futures for June rose 0.3% to $4,822.40. U.S. President Donald Trump expressed confidence that an agreement could soon be reached to end the Iran war, as a 10-day Israel-Lebanon ceasefire commenced. World stocks held near record highs and were set for their third straight week of gains. "Seen through the lens of gold, there's a shift towards risk assets, especially equities, which are at an all-time high, but nevertheless, gold is receiving a bit of a tailwind due to prevailing dollar weakness and Treasury yields edging lower," said independent analyst Ross Norman. The U.S. dollar was headed for a second weekly drop, and hovered near six-week lows, making greenback-priced bullion cheaper for other currency holders. Optimism over a possible U.S.-Iran deal kept oil prices below $100 per barrel, easing fears of higher inflation. Soaring energy prices have stoked inflation fears and concerns that interest rates could remain higher for longer. Gold prices have fallen close to 8% since the U.S.-Israeli war on Iran began on February 28. While the yellow metal is considered an inflation hedge, higher interest rates dampen demand for the non-yielding asset. Traders now see an almost 31% chance of at least one 25-basis-point U.S. interest rate cut in December. Before the war, there were expectations of two reductions this year. Meanwhile, Indian banks have halted gold and silver import orders from overseas suppliers, with tons of the metals stuck at customs as a formal government order has not been issued authorising bullion imports. Spot silver rose 1.5% to $79.58 per ounce, and was headed for a fourth straight weekly gain. Platinum fell 0.2% to $2,081.95, while palladium was up 0.3% at $1,555.95. Both metals were on track for a third straight weekly gain. (Reporting by Ishaan Arora in Bengaluru; Editing by Elaine Hardcastle and Ros Russell)