Gold rises on softer US Dollar, traders await Trump's address on Iran war

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Gold price rises to around $4,775 in Thursday’s early Asian session, up 2.40% on the day.
Trump is scheduled to address the nation on the Iran conflict.
Traders brace for the US Nonfarm Payrolls report later on Friday.

Gold price (XAU/USD) extends the rally to near $4,775 during the early Asian session on Thursday. The precious metal surges amid a weakening US Dollar (USD) and cooling geopolitical tensions in the Middle East. Nonetheless, Gold is ‌heading for a monthly decline as the US-Iran war has driven expectations of inflation and higher global interest rates.

US President Donald Trump said in a Truth Social post that Iran's president asked for a ceasefire, but Iran's foreign ministry spokesperson called that assertion false and baseless. Trump is set to deliver a rare primetime address at 01:00 GMT on Thursday as the Strait of Hormuz remains largely closed.

Surging energy ‌prices have raised inflation concerns and prompted markets to reassess their interest rate expectations. The Federal Reserve (Fed) held interest rates steady at a target range of 3.50% to 3.75% following its March meeting last week.

The median "dot plot" projection still suggested one 25-basis-point (bps) rate cut later in 2026, though some officials now expect no cuts at all this year. Gold is often used as a hedge against inflation and geopolitical uncertainty, but it does not yield interest, making it less attractive when interest rates are high.

A series of economic data will be released later this week, including US weekly Initial Jobless Claims and Nonfarm Payrolls (NFP). In case of weaker-than-expected outcomes, this could drag the Greenback lower and lift the USD-denominated commodity price in the near term.

Gold FAQs

Why do people invest in Gold?

Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.

Who buys the most Gold?

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

How is Gold correlated with other assets?

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

What does the price of Gold depend on?

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.