Gold advanced further on Thursday after surging in the previous session, supported by falling long-term Treasury yields and a softer US dollar.
Growing optimism surrounding a potential agreement between the United States and Iran has eased fears of a prolonged energy shock, helping reduce inflation concerns.
The subsequent retreat in Treasury yields helped improve gold’s appeal.
However, the outlook remains fragile. Any setback in negotiations could quickly reignite global inflation fears, driving yields higher and weighing on bullion. Stronger demand for the US dollar could also weigh on the metal and limit its rebound. As a result, gold could remain highly sensitive to geopolitical headlines and shifts in energy markets.
Looking ahead, investors will closely monitor the upcoming US employment reports for further clues on the strength of the economy and the Federal Reserve’s monetary policy outlook, in addition to any progress in diplomatic talks in the Middle East. Meanwhile, central bank purchases could provide a supportive longer-term backdrop for gold if the trend continues.
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