On Thursday, gold prices saw an increase, supported by a weakening dollar, as investors reflected on the growing optimism about a potential U.S.-Iran agreement intended to address the conflict that has pushed energy prices up and raised worries about inflationary pressures. Spot gold rose by 0.9% to 4,830.66 per ounce by 0103. Gold futures in the U.S. for June delivery increased by 0.6%, reaching $4,852.40.

The U.S. dollar stayed near its lowest level in more than a month, leading to a drop in the prices of dollar-denominated commodities, such as bullion, for those holding other currencies. Global equities saw a significant rise as oil prices fell, fueled by positive sentiment surrounding a potential easing of tensions between the U.S. and Iran. On Wednesday, the Trump administration expressed hope about the possibility of resolving the conflict with Iran, while also warning that economic pressures on Tehran would increase if it persisted in avoiding negotiations.

U.S. President Donald Trump conveyed his view that the situation with Iran is nearing its end, even with the shipping blockade he declared and the noticeable decrease in traffic through the Strait of Hormuz. Market participants currently assign a 29% probability to a 25-basis-point reduction in U.S. interest rates within the current year. Before the conflict, there were expectations of two cuts in interest rates for this year. The SPDR Gold Trust, known as the largest gold-backed exchange-traded fund in the world, announced a 0.2% rise in its holdings, totaling 956.56 metric tons on Tuesday.

Meanwhile, the silver market is nearing its sixth straight year of structural deficit, with 762 million troy ounces drawn from inventories since 2021. The current trend increases the likelihood of a fresh liquidity squeeze, despite lower demand expectations, as noted by the Silver Institute and consultancy Metals Focus in their report on Wednesday. Spot silver rose by 1.4% to $80.17 per ounce, platinum increased by 1.2% to $2,134.55, and palladium climbed by 1.1% to $1,590.14.