Gold edges higher as investors weigh US-Iran ceasefire deal reports, Fed rate outlook

Gold prices inched higher on Friday as investors assessed reports of a U.S.-Iran ceasefire deal amid growing concerns around inflation and U.S. interest rate hikes.

FUNDAMENTALS

* Spot gold was up 0.4% at $4,512.79 per ounce, as of 0113 GMT. The metal was up about 0.1% for the week so far.


* U.S. ‌gold futures ⁠rose 0.2% ⁠to $4,543.10.

* Bullion fell to a two-month low on Thursday before closing higher on reports of a U.S.-Iran ceasefire extension.

* The United States and Iran reached an agreement on Thursday to extend their ceasefire and lift restrictions on shipping through the Strait of Hormuz, sources told Reuters, though U.S. President Donald Trump has yet to approve it ⁠and Iranian ‌state media said it had not been finalised.

* U.S. inflation increased at its fastest pace in three years in ⁠April, driven by higher energy prices due to the Iran war and cementing economists' views that the Federal Reserve would hold interest rates unchanged well into next year.

* St. Louis Federal Reserve President Alberto Musalem said the central bank may need to increase its policy rate if inflation does not resume easing within the next six months.

* Federal Reserve Bank ‌of New York President John Williams said central bank monetary policy is in the right place given the outlook, adding he expects inflation to ⁠be high in the near term with the pressures easing later in the year.

* China's net gold imports via Hong Kong rose 81.2% in April from the previous month, data showed.

* Spot silver rose 0.7% to $76.17 per ounce, platinum gained 0.2% to $1,926.18, and palladium rose 0.9% to $1,380.94.

DATA/EVENTS (GMT)

0645 France GDP QQ Final Q1

0645 France CPI (EU Norm) Prelim YY, MM May

0645 France CPI Prelim YY, MM NSA May

0755 Germany Unemployment Chg, Rate SA May

1000 France Unemp Class-A SA Apr

1200 Germany CPI, HICP Prelim YY May