Gold prices rose after President Donald Trump cancelled planned Iran strikes, easing oil-driven inflation fears and reducing rate-hike expectations, while investors assessed Fed policy, jobless claims and Middle East risk.

Key Highlights

  • Gold rose 3.41% to $4,210.64 as Trump’s Iran decision eased inflation fears.
  • Spot gold gained 2% to $4,153.71 per ounce after hitting a multi-month low.
  • Lower rate-hike expectations supported bullion, though Fed policy risk remains central.

Gold Rebounds as Geopolitical Pressure Shifts

Gold prices rose sharply on Thursday after President Donald Trump cancelled planned military strikes against Iran, easing concerns that a broader Middle East conflict could trigger another surge in oil prices and keep U.S. interest rates elevated for longer.

Gold traded at $4,210.64, up $138.72, or 3.41%, according to the latest commodity board reading. In spot trading, gold climbed 2% to $4,153.71 per ounce by 2:00 p.m. ET, recovering after touching its lowest level since late November earlier in the session. U.S. gold futures for August delivery settled 0.5% lower at $4,114, showing that the physical and futures markets were not moving in perfect alignment.

The rebound reflected a shift in the market’s inflation and rate expectations rather than a simple safe-haven move. Gold had been under pressure as rising oil prices raised the risk of stickier inflation and higher interest rates. Trump’s decision to pause military action changed that calculation.

Why Trump’s Iran Decision Mattered for Gold

Gold is usually seen as a hedge against financial stress, currency weakness and inflation. But the current market setup is more complicated. When oil prices rise sharply, inflation expectations can increase. That can push investors to expect higher interest rates, which usually weighs on gold because the metal offers no yield.

Trump’s cancellation of planned strikes reduced the immediate risk of an oil-led inflation shock. That helped gold recover from earlier weakness. Markets also lowered the probability of a December U.S. rate hike to 62%, down from 69%, according to the CME FedWatch tool cited in the Reuters reference.

This matters because the gold market is highly sensitive to real interest rates. When rate expectations fall, the opportunity cost of holding bullion declines. That can support gold even when risk appetite improves.

Fed Policy Remains the Main Constraint

Gold’s rebound came despite fresh inflation pressure in the U.S. Producer prices rose more than expected in May, while consumer inflation also increased at its fastest pace in three years, driven partly by energy-related costs. These figures keep the Federal Reserve at the centre of the gold price outlook.

Investors are now looking toward next week’s Fed meeting, the first under Chair Kevin Warsh. Rates are expected to remain unchanged, but the tone of the policy statement will matter. If the Fed signals that inflation remains too high, gold could face renewed pressure. If policymakers sound more cautious about growth or labour-market weakness, bullion may retain support.

The labour market also added another layer to the debate. U.S. weekly jobless claims rose to 229,000 for the week ended June 6, above forecasts of 219,000. Softer labour data can support gold if investors believe it reduces the case for further tightening.

Precious Metals Rally Broadens

The move was not limited to gold. Silver rose 3.3% to $65.78 per ounce, platinum gained 2.6% to $1,708.38 and palladium climbed 4.4% to $1,267.50. The broader rally suggested that investors were repricing both geopolitical risk and monetary-policy expectations across the precious metals complex.

Still, gold remains the main macro signal. Its recovery from recent lows shows that investors are not fully dismissing Middle East risk. They are instead recalibrating the balance between geopolitical stress, oil-driven inflation and interest-rate expectations.

Conclusion

Gold’s rise shows how quickly bullion can respond when geopolitical risk changes the inflation and rate outlook. Trump’s decision to cancel Iran strikes reduced fears of an oil-led inflation shock and lowered rate-hike expectations, supporting a rebound from recent lows. The next test for gold will be whether the Fed confirms that policy pressure is easing or keeps the market focused on stubborn inflation.