Gold Rebounds on Hopes for Progress in U.S.-Iran Talks, but Market Reaction Remains Limited

Gold rebounded on May 24 as optimism grew that talks between the U.S. and Iran were making progress.

According to Bloomberg, spot gold rose to around $4,575 an ounce, recovering most of last week's losses.

The U.S. and Iran are continuing negotiations on restoring normal passage through the Strait of Hormuz. U.S. officials said the two sides were refining the wording of an agreement and that final approval could still take several days.

President Donald Trump wrote on Truth Social that negotiations with Iran were proceeding in an orderly and constructive manner, while adding that he would not rush a deal. Earlier, Secretary of State Marco Rubio said positive news could emerge within the next few hours.

The market remains wary because uncertainty around the talks has not disappeared. Justin Lin, an analyst at Global X ETFs, said investors had already seen Trump-driven hopes for a deal collapse several times. Until Iran shows a concrete sign of cooperation, it will be difficult to be confident that inflation expectations will move lower, he added.

Gold is still about 13% below the level seen before the Middle East conflict broke out in February. A recent jump in oil prices tied to regional risks has also led markets to factor in the possibility of additional rate hikes from the Federal Reserve.

Traders are increasingly betting the Fed could raise rates by December. CME FedWatch data showed a 97.3% probability that the central bank will hold rates steady at its June meeting, with the odds of a 25-basis-point increase at 2.7%. Higher interest rates typically weigh on gold because the metal does not pay interest.

Silver rose 4% to $78.53 an ounce. Platinum and palladium also advanced.