Gold Prices Rebound Over 1% as Easing Geopolitical Tensions Weigh on Dollar, Oil

Gold prices rose more than 1% on Thursday, rebounding from a one-week low as an easing U.S. dollar and a pullback in crude oil prices boosted the precious metal. The move came as traders assessed signs of potential de-escalation in the recent military conflict between the United States and Iran.

Market Drivers

The rally pushed bullion higher after a losing session on Wednesday. Key price points from Thursday's trading include:

• Spot gold increased by 1.2% to $4,124.36 per ounce as of 16:45 ET (20:45 GMT).
• Gold futures also gained 1.2%, settling at $4,133.17 per ounce.

The precious metal's advance was supported by a softening U.S. dollar, which makes dollar-denominated assets like gold more affordable for international buyers. Simultaneously, a decline in oil prices helped temper immediate inflation fears that had flared earlier in the week.

Geopolitical Backdrop

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Market sentiment shifted after U.S. President Donald Trump told reporters that Iran "want to make a deal so badly." According to Investing.com, traders took these comments as a sign that a wider military conflict might be avoided, reducing the safe-haven demand for the dollar and causing oil prices to retreat from their three-week highs.

The comments followed a significant escalation where the U.S. military launched strikes against approximately 170 targets in Iran in response to attacks on oil tankers. Iranian armed forces retaliated by striking U.S. bases in the region, according to state media reports.

Federal Reserve Outlook

The market moves also came as investors digested minutes from the Federal Reserve's June 16-17 policy meeting. The report, released Wednesday, showed that Federal Open Market Committee (FOMC) policymakers were deeply divided on the outlook for interest rates.

While a few participants advocated for an immediate rate hike, the minutes indicated broad uncertainty about the path of inflation. Supporting a less aggressive stance, New York Fed President John Williams said Thursday he did not expect a sustained rise in energy prices. According to David Morrison, senior market analyst at Trade Nation, lower oil prices could "reduce the need for aggressive monetary tightening," a scenario that would typically support non-yielding assets like gold.