By: Economy Middle east

Gold prices rose on Friday and were on track for a fourth consecutive weekly gain, as optimism surrounding a potential U.S.-Iran peace deal helped ease concerns over rising inflation and sustained high interest rates.

Spot gold inched up 0.43 percent to $4,806.19 per ounce by 5:05 GMT, bringing gains for the week to around 1.18 percent. Meanwhile, U.S. gold futures for June delivery rose 0.39 percent to $4,826.90.

In the UAE, gold rates posted notable increases, with 24-carat gold rising AED1 to AED578.75 and 22-carat gold increasing AED1 to AED536.

Additionally, 21-carat gold edged up AED1 to AED514, while 18-carat gold rose AED0.75 to AED440.5.

Meanwhile, 14-carat gold gained AED0.5 to AED343.5.

Fed rate cut prospects support bullion

Gold prices continued to rise after a 10-day ceasefire between Lebanon and Israel came into effect on Thursday, while U.S. President Donald Trump said the next round of talks between the United States and Iran could take place over the weekend.

Meanwhile, the U.S. dollar was on track for a second straight weekly decline, making dollar-denominated commodities more affordable for holders of other currencies.

Oil prices also moved lower, easing concerns about rising inflation amid optimism that the Iran war may be approaching an end. Fears that elevated energy costs could fuel inflation and keep global interest rates higher for longer have weighed on gold, pushing prices down by more than 8 percent since the conflict began in late February.

While gold is typically viewed as a hedge against inflation, higher interest rates tend to reduce its appeal as a non-yielding asset. Traders now see a 27 percent chance of a 25-basis-point Federal Reserve rate cut in December, compared with earlier expectations of two cuts this year before the war.

Meanwhile, Indian banks have suspended orders for gold and silver imports from overseas suppliers, leaving large volumes of the metals stranded at customs due to the absence of formal government authorization for bullion imports.

Other precious metals

As gold prices rose, the precious metals market posted notable gains. Spot silver rose 0.82 percent to $79.05 per ounce and was on track for a fourth consecutive weekly gain. Platinum added 0.06 percent to $2,087.07, while palladium increased 0.13 percent to $1,552.75.

Both metals were also set to extend their gains for a third straight week.