<ul>
<li>Trump pauses effort to escort ships in the Strait of Hormuz</li>
<li>Trump says great progress made towards deal with Iran</li>
<li>Dollar, oil ease as Trump indicates possible Iran peace deal</li>
</ul>
(Updates prices, adds details as of 0632 GMT)
By Noel John
May 6 (Reuters) - Gold prices climbed more than 2% on Wednesday after U.S. President Donald Trump indicated a possible peace deal may be reached with Iran, sending the dollar and crude lower as inflation concerns ebbed somewhat.
Spot gold (XAU=) jumped 2.4% to $4,667.39 per ounce, as of 0632 GMT, having hit its highest since April 28. U.S. gold futures (GCcv1) for June delivery rose 2.4% to $4,678.20.
U.S. President Donald Trump said on Tuesday he would briefly pause an operation to help escort ships through the Strait of Hormuz, citing progress toward a comprehensive agreement with Iran. (USD/) (O/R)
U.S. Secretary of State Marco Rubio told reporters on Tuesday that “operation Epic Fury is concluded,” adding that “we’re not cheering for an additional situation to occur.”
Gold gained as “oil prices retreated on reduction in geopolitical risk premium, after the U.S. confirmed that the ongoing fragile ceasefire between Iran is still intact, despite the skirmish that was seen at the start of this week,” said Kelvin Wong, a senior market analyst at OANDA.
“Any signs of re-escalation of tension between the two of them, you will see gold prices seeing some form of profit-taking, or for short-term speculators to unwind their near-term net long position in gold,” Wong said.
A weaker U.S. currency makes dollar-priced metals cheaper for holders of other currencies. ] USD/]
Elevated crude oil prices can stoke inflation, increasing the likelihood of higher interest rates. While gold is considered an inflation hedge, high interest rates make yield-bearing assets more attractive, weighing on its appeal.
Investors await U.S. non-farm payrolls later this week, which will test whether the economy remains resilient enough to keep the Federal Reserve’s monetary policy on hold.
“Factors such as economic growth risks, worsening geopolitical relations, currency volatility and downside risks to equity markets will continue to support gold’s role as a portfolio diversifier,” ANZ said in a note.
Spot silver (XAG=) rose 4.2% to $75.84 per ounce, platinum (XPT=) gained 2.6% to $2,002.75, and palladium (XPD=) was up 2.5% at $1,522.93.

On May 4 (ET), the US military announced it had forcibly opened a free-passage corridor through the Strait of Hormuz. Iran immediately fired warning shots at a US destroyer, while Trump threatened that any attack on American vessels would result in Iran being "blown off the face of the earth." Meanwhile, Iran had just submitted a 14-point ceasefire proposal to Washington — covering US troop withdrawal, lifting of the naval blockade, and sanctions relief — only to be met with Trump's flat rejection: "unacceptable." With gunfire and diplomacy playing out simultaneously, will the Middle East tip toward war or peace? And what does it mean for oil prices and global assets? Share your take below.

On May 4 (ET), the US military announced it had forcibly opened a free-passage corridor through the Strait of Hormuz. Iran immediately fired warning shots at a US destroyer, while Trump threatened that any attack on American vessels would result in Iran being "blown off the face of the earth." Meanwhile, Iran had just submitted a 14-point ceasefire proposal to Washington — covering US troop withdrawal, lifting of the naval blockade, and sanctions relief — only to be met with Trump's flat rejection: "unacceptable." With gunfire and diplomacy playing out simultaneously, will the Middle East tip toward war or peace? And what does it mean for oil prices and global assets? Share your take below.

US-Iran Strait Showdown! Is There Still Room for Negotiation?

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