Gold Extends Weekly Gains on Ceasefire Optimism
Gold prices climbed more than 1% on Thursday, rising to $4,867.39 per troy ounce as investors reacted positively to developments in US-Iran diplomatic negotiations. The precious metal is now on track to end the week 0.8% higher, marking a fourth consecutive weekly gain.
The rally comes amid reports that Washington and Tehran are considering extending their two-week ceasefire, with attention shifting to a potential second round of discussions expected to focus on reopening the Strait of Hormuz and Iran's nuclear enrichment program. News that the strategic waterway will remain fully open to commercial shipping during the ceasefire between Israel and Lebanon provided additional support.
Dollar Weakness Supports Precious Metals
A weaker US dollar, hovering near six-week lows, has provided a tailwind for gold prices. The Federal Reserve's cautious approach to inflation has eased expectations of aggressive monetary tightening, with CME Group data showing a 99.5% probability that interest rates will remain at 3.50-3.75% through April.
Gold has gained 0.99% over the past month and an impressive 41.73% compared to the same period last year. The metal's breach of the $4,800 threshold earlier this month reflects the cumulative effect of Federal Reserve easing, dollar weakness, trade policy disruption, and safe-haven demand converging within a single calendar month.
Silver Climbs on Industrial Demand Concerns
Silver rose 1.52% to $79.60 per troy ounce on Thursday, with prices briefly touching above $80 as investors assessed the outlook for renewed Middle East negotiations. The white metal has outperformed gold significantly, gaining 5.65% over the past month and a remarkable 143% compared to last year.
However, supply concerns continue to weigh on the market. The Silver Institute and Metals Focus have warned of a sixth consecutive year of structural deficit, with 762 million troy ounces drawn from stocks since 2021. Industrial demand is forecast to decline 3% to 640 million ounces in 2026, though this remains elevated by historical standards.
Analysts See Further Upside
Wall Street remains bullish on gold's prospects. JP Morgan analysts expect prices to push toward $5,000 per ounce by the fourth quarter of 2026, with $6,000 per ounce a possibility over the longer term. Central bank and investor demand for gold is projected to remain strong, averaging 585 tonnes per quarter in 2026.
Analysts surveyed by the London Bullion Market Association predict gold could exceed $5,000 this year, with projections underpinned by expectations of lower US real interest rates, continued Federal Reserve easing, and ongoing central bank diversification away from the dollar.
The record high for gold remains $5,589 per ounce, set on January 28, 2026, suggesting the metal has room to recover from its recent consolidation phase if geopolitical conditions remain favorable.
Sources: Trading Economics, JP Morgan Global Research, Silver Institute, Metals Focus, CME Group, London Bullion Market Association