US-Iran Conflict Eases, Gold Prices Strengthen and US Dollar Weakens

Global gold prices continued their strengthening on Thursday’s trading (7/5/2026), after recording the largest daily increase since late March. Market optimism regarding the potential agreement between the United States (US) and Iran became one of the main driving factors behind the rise in the precious metal. Citing Bloomberg, the spot gold price broke above the $4,700 per ounce level after surging around 3 percent in Wednesday’s trading (6/5/2026). At the same time, the US dollar exchange rate weakened back to pre-conflict levels. This condition provided positive sentiment for gold, which is priced in the US currency and offers no interest yield. A Bloomberg report stated that Iran is evaluating the latest proposal from the US to end the war that has lasted nearly 10 weeks. China also added to global diplomatic pressure for the two countries to quickly halt the conflict. In a social media post on Wednesday, Trump said the US would halt its military operations and lift the blockade on the Strait of Hormuz if Iran agrees to the points of the discussed agreement. “News regarding the potential peace agreement is driving the strengthening of precious and base metals this morning,” wrote TD Securities analyst Ryan McKay in his note. However, he cautioned that the situation remains highly vulnerable to change because the US and Iran’s demands are considered not much different from previous proposals. Although the market is starting to respond positively to the chances of peace, several US central bank officials are still warning of inflation risks. Since the conflict broke out at the end of February, gold prices have fallen around 11 percent. The previous closure of the Strait of Hormuz had triggered a surge in energy prices and increased market concerns about high inflation that could potentially keep interest rates at high levels for longer. In Thursday’s midday trading in Singapore, the spot gold price rose 0.2 percent to $4,701.96 per ounce. Meanwhile, silver prices rose 0.6 percent to $77.83 per ounce after surging 6.2 percent the previous day. On the other hand, platinum prices were recorded as weakening, while palladium strengthened. The Bloomberg US dollar index was observed as stable after falling 0.6 percent in the previous session.