Gold rose more than 1% on Thursday, recouping losses from the previous session, as oil prices fell after the U.S. and Iran signed an interim agreement to end their war.
Spot gold rose 1.5% to $4,322.41 per ounce by 0102 GMT after declining 1.7% on Wednesday. U.S. gold futures for August delivery fell 0.9% to $4,343.10.
The United States and Iran released the text of their interim agreement on Wednesday, with U.S. President Donald Trump threatening to resume attacks and kill Iranian officials if they failed to honour their commitments.
The 14-point agreement extends the ceasefire announced in April by another 60 days to allow the two sides to negotiate a final truce.
Oil prices fell, reversing gains made on Wednesday after Trump said he could resume his bombing campaign if Iran’s leaders “don’t behave”.
The Federal Reserve held interest rates steady on Wednesday, but policymakers expect a hike in borrowing costs later this year amid growing concerns about inflation lodged above the U.S. central bank’s 2% target.
Nine of the central bank’s 19 policymakers now believe they will need to raise the policy rate this year, according to projections published on Wednesday.
Major stock indexes fell, bond yields rose and the U.S. dollar extended gains on Wednesday after the Fed projections showed officials expect a hike in borrowing costs later this year amid increasing inflation concerns.
Spot silver rose 2.2% to $69.51 per ounce, platinum gained 1.8% to $1,767.53, and palladium was up 2% at $1,338.67.
