Spot gold climbed past $4,326 an ounce on Friday, its highest level in seven weeks, capping a weekly gain of more than 7%. The rally came as cooling inflation fears tied to US-Iran peace talks drew buyers into the safe-haven metal.
Why gold jumped
The price move follows a stretch of anxiety over inflation, which had been pushing investors toward assets that hold value. That pressure eased this week as the US and Iran moved toward negotiations, reducing the risk of a supply shock that could reignite price pressures. Gold, which often thrives when inflation expectations soften or when geopolitical tensions fade, climbed steadily through the session. The metal's weekly gain of 6.6% is its best in months, and the last time it traded this high was seven weeks ago.
The Fed factor
Alongside the gold rally, market pricing for a September Federal Reserve rate hike dropped sharply to 55%. The lower odds suggest traders see less need for aggressive monetary tightening if inflation cools on its own. That combination – cheaper money expectations and a calmer inflation outlook – tends to support non-yielding assets like gold. For now, the shift in rate expectations is giving bullion an extra push.
What to watch
Whether gold holds above $4,300 will depend on how the US-Iran talks progress and what signals Fed officials send in the coming weeks. A breakthrough could keep inflation fears muted and extend the rally. A breakdown, on the other hand, might send prices back toward recent ranges. Traders are watching both fronts closely.
