FX.co ★ Gold Rises on Rate Cut Bets and US-Iran Talks

Gold inched higher to $4,780 per ounce on Friday, on track for a third consecutive weekly gain, supported by a weaker US dollar and investor attention on US–Iran diplomatic talks scheduled in Islamabad this weekend. The metal rose 2% over the week as expectations of earlier US interest rate cuts bolstered appetite for non-yielding assets. A two-week ceasefire also helped ease oil prices and temper inflation concerns.

However, the fragile truce showed signs of strain on Friday, with Israeli strikes on Lebanon and ongoing disruptions in the Strait of Hormuz threatening to complicate negotiations. Meanwhile, the latest US CPI report—the first since the conflict began—showed inflation rising to 3.3%, the highest since May 2024, while the monthly index jumped 0.9%, the sharpest increase since mid-2022. Markets are now pricing in a 30% probability of at least a 25-basis-point rate cut in December.

In the physical market, gold demand in India picked up ahead of a key festival, while premiums in China narrowed as retail buying softened.