Spot gold was up 0.3% at $4,227.17 per ounce as of 2:15 p.m. ET (1815 GMT), and was down 2.3% for the week.

U.S. gold futures rose 3% to settle at $4,238.80.

“I think that the inflation ‌is going to ⁠linger ⁠for some time, even if oil prices do come down… we’ve heard this story before and there’s some degree of scepticism,” said Peter Grant, vice president and senior metals strategist at Zaner Metals.

Oil prices fell over 3% after the news that a memorandum between the United States and Iran to halt the war in the Gulf could be signed as soon as Sunday, a Western source told Reuters on Friday. Iran’s ⁠Fars news ‌agency, however, denied that speculation, citing a source close to the negotiations. [O/R]

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Gold has been under pressure since the conflict began at the end of ⁠February, on concerns that oil-driven inflation means central banks will keep interest rates elevated.
While investors regard gold as an inflation hedge, higher rates tend to weigh on the non-yielding metal. Traders are pricing in a 57% chance of a U.S. rate hike by December, according to the CME FedWatch tool.

Data this week showed U.S. producer prices increased more than expected in May, while consumer inflation jumped above 4%.

Attention is also turning to the Federal Reserve’s June 16-17 ‌policy meeting, the first to be chaired by Kevin Warsh, when the market expects the bank to hold rates steady.

UBS has lowered its gold outlook, warning that delayed Fed rate ⁠cuts will pressure prices toward the $3,850-4,000/oz range in the near term.

Elsewhere, Rolex raised the global price of its gold watches by an average 5% this month, marking a rare second annual increase for its main markets including Britain, Hong Kong and the U.S., according to two luxury research platforms and two dealers.

Spot silver rose 1.2% to $68.14 per ounce and palladium added 0.7% to $1,281.04, with both metals headed for weekly gains. Platinum fell 0.8% to $1,706.90 and was headed for a weekly loss.

By Sandra Rhouma

The market is pricing in higher euro rates through 2031. But can the region’s economy take them?

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Traders were also digesting unprecedented demand for shares in SpaceX, which raised $75 billion in an initial public offering and jumped about 20% in its Nasdaq debut.

The euro was little changed at $1.15725, hovering near a one-week high and set for a weekly ‌gain after the ⁠European Central ⁠Bank delivered its first interest rate hike in three years on Thursday.

PEACE DEAL

Leaked terms of a proposed memorandum to end the war in the Gulf, outlined by Western, Pakistani and Iranian sources on Friday, appeared to favor Iran, drawing criticism from U.S. President Donald Trump who called the reports inaccurate. Trump’s announcement on Thursday regarding a deal had prompted Wall Street shares to rally, oil prices to slip and the U.S. dollar to fall.

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Markets are pausing as they assess the prospects for ⁠peace and ‌the impact of the SpaceX IPO, with investors watching whether funds will shift from equities or cash, said John Velis, FX and macro strategist at BNY.
“The hoped-for good ⁠news on the ceasefire in the Middle East had a big reaction overnight and I think we came in this morning and we have the SpaceX IPO and a bunch of central bank meetings next week,” Velis said.
The U.S. dollar was up 0.18% against Japan’s currency at 160.225 yen, holding near a key level that often triggers concern about intervention from Tokyo.
The pound was steady at $1.34145. Data showing the UK economy contracted in April had little impact, with markets focused on Iran talks.

The U.S. dollar index, which ‌measures the greenback against a basket of six currencies, was flat at 99.75 after hitting a one-week low on Thursday.

Investors have tended to buy the safe-haven dollar when tensions in the Iran war flare, ⁠and sell it in favor of riskier assets such as stocks when peace talks appear to make progress.

FED IN VIEW

Data on Thursday showed U.S. producer prices increased more than expected in May, ahead of Kevin Warsh’s first rate-setting meeting as chair of the Federal Reserve next week.

Traders expect the Fed to keep rates steady at 3.5% to 3.75%, but see a greater than 50% chance of a hike by year-end. Pricing edged slightly lower on Thursday after Trump’s comments on a potential deal.

Against the Swiss franc, the dollar strengthened 0.21% to 0.79680.

In cryptocurrencies, bitcoin gained 0.40% to $63,595.26. Ethereum declined 0.29% to $1,665.87.

Brent futures were down $3.34, or 3.7%, at $87.04 a barrel by 1035 CDT (1535 GMT), while U.S. West Texas Intermediate (WTI) crude dropped $3.11, or 3.55%, to $84.60. Both contracts were at their lowest prices since April 17.

“The market thinks we’re closer to the deal,” said Phil Flynn, senior analyst with ‌Price Futures Group.

A ⁠memorandum between ⁠the U.S. and Iran to halt the war in the Gulf could be signed as soon as Sunday, a Western source told Reuters on Friday, with Geneva emerging as the likeliest venue.

Iran’s Fars news agency, however, citing a source close to the negotiations, denied that speculation.

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U.S. President Donald Trump called off his threatened air strikes on Thursday, while Iran’s Mehr news agency reported that final negotiations on the memorandum would focus on nuclear and economic issues but would exclude discussions about Iran’s missile programme.
Iran’s IRNA news agency, meanwhile, said nuclear talks would take place within ⁠a 60-day ‌period after a memorandum was signed. “Headlines are driving the market once again as confidence grows that an eventual deal will be struck and the Strait (of Hormuz) reopens,” said Tamas Varga, an analyst ⁠at PVM Oil Associates.

The caveat, however, is that global and regional oil stocks are still low and could drift lower, even with a deal, as it would take time to ensure uninterrupted oil flows, he added.

On Thursday, Iran announced a complete closure of the strait, saying it would fire on any ship trying to pass through the waterway. Traffic through the strait, which normally carries a fifth of global oil and liquefied natural gas shipments, has been extremely limited as a result of the war.

The U.S. military, however, said on social media that commercial ships continued to transit the waterway.

“We ‌believe the market reaches an inflection point in late July if we do not see oil flows resuming before then,” ING analysts said in a note. “This is when inventory levels and seasonally stronger demand push prices significantly higher towards $120-130 ⁠per barrel.”

Goldman Sachs lowered its 2027 average Brent forecast to $80 a barrel on higher supply and lower demand, but expects prices to exceed the 2025 average on stockpiling of OECD commercial oil stocks and a security premium for disruptions.

The Organization of the Petroleum Exporting Countries lowered its forecast for 2026 world oil demand growth to 970,000 barrels per day on Thursday from a previous 1.17 million bpd – its second straight downward revision.

The producer group also said consumption would eventually rebound. It expects oil demand in 2027 to rise by 1.73 million bpd, up 190,000 bpd from its previous forecast.