FX.co ★ Gold Rises on Ceasefire Hopes but Heads for 2% Monthly Drop

Gold rose for a second straight session on Friday, reaching $4,530 an ounce, following reports that the United States and Iran may extend their ceasefire. Despite the uptick, the metal remained on course for a monthly loss of about 2%, weighed down by persistent inflation concerns and expectations that interest rates will stay elevated for an extended period.

Efforts to end the three-month conflict continued, with reports pointing to a tentative 60-day extension of the ceasefire to facilitate formal negotiations. However, the agreement still requires approval from President Trump. Even with signs of diplomatic progress, bullion faced pressure from the broader macroeconomic backdrop, as ongoing disruptions to shipping and energy infrastructure threaten to keep oil prices high and reinforce the Federal Reserve’s cautious stance.

US inflation data released this month showed the fastest price increase in three years in April, strengthening expectations that the Fed will hold rates steady well into 2027. On the physical market, gold demand in India remained subdued, constrained by elevated domestic prices and steep import duties. In top consumer China, bullion premiums narrowed as investor sentiment turned more cautious.