Gold prices moved higher on Thursday as a weaker U.S. dollar and lower crude oil prices provided support for the precious metal. Investors were assessing renewed hopes that tensions in the Middle East could ease, following more positive signals around a possible resolution to the U.S.-Iran conflict.

As of 02:18 GMT, spot gold rose 0.7% to USD 4,461.09 per ounce. U.S. gold futures for August delivery gained 0.5% to USD 4,487.90 per ounce. The weaker dollar made gold, which is priced in U.S. dollars, more affordable for holders of other currencies.

According to Tim Waterer, chief market analyst at KCM Trade, gold’s gains remain highly dependent on movements in oil prices and the U.S. dollar. Gold tends to move higher when both pull back, and any sustained momentum will likely require further positive headlines related to U.S.-Iran peace expectations.

Oil prices eased in early trading after the ceasefire between Lebanon and Israel raised hopes for a broader agreement to end the conflict with Iran. Lower oil prices also helped reduce inflation concerns, easing pressure over the possibility of interest rates staying higher for longer.

New York Federal Reserve President John Williams said he does not expect inflation risks from the Middle East conflict to be long-lasting and reiterated that there is currently no need to change U.S. monetary policy.

However, gold may continue to trade with volatility. Matt Simpson, senior analyst at StoneX, said the bull run may not be over, but the market appears to be entering a shakeout phase. He expects choppy trading toward the end of the year, with a slight upward bias.

Among other precious metals, spot silver rose 0.6% to USD 73.13 per ounce, platinum gained 0.7% to USD 1,872.11, and palladium added 0.9% to USD 1,313.51.

Overall, gold is being supported by a weaker dollar, lower oil prices and hopes that geopolitical tensions may ease. However, its next move will still depend heavily on oil, the dollar, interest rates and new developments from the Middle East.

This content is for market information purposes only and does not constitute investment advice or a buy/sell recommendation.

Source: Reuters