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Gold Set for Weekly Gain as Markets Focus on US-Iran Peace Deal Prospects

FILE PHOTO: Gold ornaments are placed for polishing inside a Senco Gold & Diamonds jewelry workshop in Kolkata, India, January 29, 2026. REUTERS/Sahiba Chawdhary/File Photo
FILE PHOTO: Gold ornaments are placed for polishing inside a Senco Gold & Diamonds jewelry workshop in Kolkata, India, January 29, 2026. REUTERS/Sahiba Chawdhary/File Photo
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Gold Set for Weekly Gain as Markets Focus on US-Iran Peace Deal Prospects

FILE PHOTO: Gold ornaments are placed for polishing inside a Senco Gold & Diamonds jewelry workshop in Kolkata, India, January 29, 2026. REUTERS/Sahiba Chawdhary/File Photo
FILE PHOTO: Gold ornaments are placed for polishing inside a Senco Gold & Diamonds jewelry workshop in Kolkata, India, January 29, 2026. REUTERS/Sahiba Chawdhary/File Photo

Gold rose on Friday and was headed for a weekly gain on easing fears of inflation and higher interest rates, as investors remained optimistic about a US-Iran peace deal despite renewed hostilities.

Spot gold was up 0.85% at $4,709.06 per ounce, as of 0739 GMT. Bullion has gained 2% so far this week.

US gold ‌futures for June ‌delivery rose 0.1% to $4,716.50. The United States ‌and ⁠Iran exchanged fire ⁠on Thursday in the most serious test yet of their month-long ceasefire, but Iran said the situation returned to normal while the US said it did not want to escalate.

"The comments that we've had from the Trump administration this morning that the ceasefire is holding and that there's still lingering optimism that ⁠a deal will get done between the US ‌and Iran - that's kind of ‌supporting the gold market for now," said Kyle Rodda, a senior financial ‌market analyst at Capital.com.

Gold prices have fallen more than 10% ‌since the war began in late February, pressured by higher oil prices. Elevated crude oil prices can stoke inflation, increasing the likelihood of higher interest rates. While gold is seen as an inflation hedge, high ‌interest rates tend to weigh on the non-yielding asset.

"We just wait for the next ⁠headline about ⁠whether the US and Iran are getting close to agreeing on something. I think that there could be some choppy price action in the next 24 hours going into the end of the week," Rodda said.

Markets now await the monthly US employment report due later in the day to assess how the Federal Reserve will move forward with monetary policy this year. Nonfarm payrolls likely increased by 62,000 last month after rebounding by 178,000 in March, a Reuters survey of economists predicted.

Spot silver rose 1.5% to $79.68 per ounce, platinum gained 1.2% to $2,045.38, and palladium was up 1.4% at $1,500.91.

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Business

FAO: World Food Prices Rise to More Than Three Year High in April

People buy food at Ningxia Night Market in Taipei, Taiwan May, 6, 2026. REUTERS/Ann Wang
People buy food at Ningxia Night Market in Taipei, Taiwan May, 6, 2026. REUTERS/Ann Wang
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FAO: World Food Prices Rise to More Than Three Year High in April

People buy food at Ningxia Night Market in Taipei, Taiwan May, 6, 2026. REUTERS/Ann Wang
People buy food at Ningxia Night Market in Taipei, Taiwan May, 6, 2026. REUTERS/Ann Wang

World food prices climbed in April to their highest in more than three years, with vegetable oils particularly elevated due to the Iran war and the effective closure of the Strait of Hormuz, the United Nations Food and Agriculture Organization (FAO) said on Friday.

FAO Chief Economist Máximo Torero said vegetable oil prices are being driven by elevated energy costs that are in turn raising demand for biofuels made using organic materials, such as oil-rich ⁠plants.

He added, however, ⁠that despite war-linked disruptions, agri-food systems were showing resilience, with cereal prices having increased only moderately thanks to adequate supplies from previous seasons.

The FAO Food Price Index, which measures changes in a basket of globally traded food commodities, rose for a third consecutive month in April to average 130.7 points, the UN agency said, up ⁠1.6% from its revised March level and the highest since February 2023.

The index hit a peak of 160.2 in March 2022 after the start of the Ukraine war, Reuters reported.

The FAO's April vegetable oil price index rose 5.9% month-on-month to its highest since July 2022 as a result of increased soy, sunflower, rapeseed oil and palm oil prices, the latter, notably, underpinned by biofuels policy incentives.

By contrast, April cereal prices rose just 0.8% from March and were up 0.4% from a year ago, reflecting modestly higher prices for ⁠the likes ⁠of wheat and maize linked to weather concerns, rising fertilizer costs and increased biofuels demand.

There are expectations for reduced 2026 wheat plantings, the UN agency said, as farmers shift to less fertilizer-intensive crops given prices for the inputs have surged.

Elsewhere, April meat prices rose 1.2% month-on-month to a record high amid limited slaughter-ready cattle in Brazil, the FAO said, while sugar dropped 4.7% thanks to forecasts for ample supply in Brazil, China and Thailand.

In a separate report, the FAO slightly raised its 2025 global cereal production estimate to a record 3.040 billion metric tons, 6% above levels seen in the prior year.

Business

Governor: Indonesia Central Bank Has Sufficient Foreign Reserves to Stabilize Rupiah

A man walks past Bank Indonesia headquarters in Jakarta, Indonesia, September 2, 2020. REUTERS/Ajeng Dinar Ulfiana
A man walks past Bank Indonesia headquarters in Jakarta, Indonesia, September 2, 2020. REUTERS/Ajeng Dinar Ulfiana
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Governor: Indonesia Central Bank Has Sufficient Foreign Reserves to Stabilize Rupiah

A man walks past Bank Indonesia headquarters in Jakarta, Indonesia, September 2, 2020. REUTERS/Ajeng Dinar Ulfiana
A man walks past Bank Indonesia headquarters in Jakarta, Indonesia, September 2, 2020. REUTERS/Ajeng Dinar Ulfiana

Indonesia's central bank has sufficient foreign exchange reserves to make the strong market interventions required to stabilize the rupiah, Governor Perry Warjiyo said on Thursday.

The central bank will intervene not only in domestic but also offshore markets around the clock, he added, according to Reuters.

The rupiah slid to a fresh record low on Tuesday, falling to 17,445 per dollar, as markets reacted to rising tensions linked ⁠to the war in Iran.

The drop prompted Bank Indonesia to renew its pledge to defend the currency by intervening consistently and measurably, and it was trading 0.3% stronger on Thursday.

Warjiyo said that rupiah's depreciation was due to rising tensions in the Middle East, high rates from the US Federal Reserve, and the exit of many global investors from all emerging markets.

Many companies paid off their debts in foreign currencies during April and May, which was another factor contributing to the rupiah's ⁠weakness, he added.

The central bank announced on Tuesday that it would tighten domestic FX rules by lowering the threshold at which dollar purchases would require documentation, cutting it to $25,000 per party per month to curb speculative demand and further ⁠shore up the rupiah.

The currency was under pressure even before the Middle East conflict broke out at the end of February, with investors concerned ⁠about Indonesia's fiscal health, the independence of its central bank and transparency issues in its capital markets.

The rupiah has weakened 4% ⁠against the US dollar so far this year, making it one of the worst performing currencies in Asia.

Business

Norway Breaks European Silence by Swiftly Raising Rates to Face War Repercussions

A view shows the building of Norway’s central bank (Norges Bank) in Oslo, Norway, June 23, 2022. REUTERS/Victoria Klesty/File Photo 
A view shows the building of Norway’s central bank (Norges Bank) in Oslo, Norway, June 23, 2022. REUTERS/Victoria Klesty/File Photo 
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Norway Breaks European Silence by Swiftly Raising Rates to Face War Repercussions

A view shows the building of Norway’s central bank (Norges Bank) in Oslo, Norway, June 23, 2022. REUTERS/Victoria Klesty/File Photo 
A view shows the building of Norway’s central bank (Norges Bank) in Oslo, Norway, June 23, 2022. REUTERS/Victoria Klesty/File Photo 

Norway’s central bank became one of the first to raise interest rates as a result of the US-Israeli attacks on Iran, warning that the conflict in the Middle East had lifted inflationary pressures as well as heightened economic uncertainty.

Meanwhile, the Swedish central bank, the Riksbank, kept its key rate unchanged and said that while the risk of higher inflation had increased somewhat due to the war in the Middle East, it could wait on developments before adjusting its policy.

On Thursday, Norway’s Norges Bank increased its policy rate by 0.25 percentage points to 4.25 %, following the lead of Australia among advanced economy central banks in raising rates.

The move was sooner than most analysts in a Reuters poll had expected.

The rich Scandinavian country is western Europe’s largest petroleum producer and has struggled to get inflation down to the central bank’s 2% target despite cutting interest rates far less in recent years than the European Central Bank, US Federal Reserve or Sweden’s Riksbank, which on Thursday held its own rates unchanged.

“The war in the Middle East is still causing substantial uncertainty about the economic outlook,” said Ida Wolden Bache, Norges Bank’s governor. She added: “Inflation is too high and has run above target for several years.”

Norway's annual core inflation rate came in at 3.0% in March, slightly lower than forecast but well above the central bank's target of 2.0%.
Norges Bank said that the Iran conflict meant “external price pressures appear to be slightly stronger” than in March, but that the recent appreciation in the krone should damp imported inflation.

It warned that if war in the Middle East changed the economic outlook, it would be forced to revise its rate forecast.

Norges Bank estimated in March that mainland GDP in Norway — stripping out the effects of oil and gas — would increase by 1.6% this year, lower than in 2025.

A majority ‌of respondents, 15 of the 23 economists in a Reuters poll conducted ahead of the announcement, had said Norges Bank would keep the policy rate ⁠on hold today, while the remaining eight expected a 25-basis-point hike.

The Norwegian crown strengthened to 10.85 against the euro by 0948 GMT, from 10.92 just before the announcement.

The bank’s statement points to a further rate hike this year, Sparebank 1 Chief Economist Elisabeth Holvik said.

“Norges Bank will raise borrowing costs again after the summer, so that the policy rate reaches 4.5% by year-end,” Holvik said.

For its part, Sweden's central bank earlier on Thursday kept its policy rate unchanged at 1.75%, as expected, but said the risk that the war in the Middle East will lead to higher inflation had increased somewhat.

The Riksbank has been in wait-and-see mode since cutting interest rates by a quarter percentage point in September last year, according to Reuters.

“There is scope to wait until there is a clearer picture of the effects of the war and the supply shocks it entails,” the central bank said in a statement.

In Poland, the central bank Governor Adam Glapinski said the likelihood of interest rate increases has grown over the past month although a hike is not a forgone conclusion for policymakers.

“Rate hikes are likely but they may not occur,” Glapinski told a news conference on Thursday. On the other hand, “rate cuts are very unlikely.”