Key Points:
- Spot gold gained 1.6% to reach $4,566.52 per ounce, while gold futures rose 1.4% to $4,597.70 on Friday afternoon.
- U.S. President Donald Trump announced an upcoming Situation Room meeting to make a final determination on the proposed Iran peace deal.
- The draft agreement includes a 60-day ceasefire extension, the immediate reopening of the Strait of Hormuz, and nuclear disarmament terms.
- High inflation remains a major headwind, as the U.S. core PCE index rose 3.8% year-on-year in April, its fastest pace since 2023.
Precious metals jumped sharply on Friday, May 29, 2026, as a weaker dollar and renewed hopes for a diplomatic breakthrough in the Middle East fueled a broad-based commodity rally. Spot gold rose 1.6% to trade at $4,566.52 per ounce by early afternoon, while gold futures gained 1.4% to reach $4,597.70 per ounce. This upward movement followed U.S. President Donald Trump’s announcement that he would soon meet with senior national security officials in the Situation Room to make a final determination on a proposed peace deal with Iran.
The Friday surge helped gold erase painful losses from earlier in the week, when bullion fell to a fresh two-month low amid intense geopolitical uncertainty. However, positive reports on Thursday suggesting that the United States and Iran would resume formal negotiations quickly revived risk appetite. Gold futures ended Thursday’s session 0.8% higher, setting the stage for a strong weekly finish as traders closely analyze the shifting headlines out of the Middle East.
The proposed agreement centers on a 60-day memorandum of understanding that would extend the current ceasefire and allow commercial cargo vessels to safely transit the blockaded Strait of Hormuz. Writing on his social media platform, Truth Social, President Trump outlined the strict terms of the deal. He stated that the agreement requires Tehran to agree that it will “never have a Nuclear Weapon or Bomb,” dismantle its nuclear capabilities, and remove all sea mines from the critical shipping lane. Once Iran meets these terms, the U.S. will lift its naval blockade, allowing stranded tankers to start “heading home.”
Trump added a unique, highly characteristic detail to the proposed terms, stating that the United States would physically assist Iran in digging up and destroying its enriched uranium stockpile, which he referred to as “nuclear dust.” He also made it clear that the U.S. will not exchange any money or provide financial compensation until further notice. He clarified that other, less important terms have already been agreed upon, and his upcoming meeting in the Situation Room will determine the treaty’s final fate.
While the prospect of a reopened shipping channel has temporarily weakened the safe-haven dollar, persistent inflation concerns continue to cap gold’s upside. Economic data released on Thursday showed that the U.S. Personal Consumption Expenditures (PCE) price index—the Federal Reserve’s preferred inflation gauge—rose 3.8% year-on-year in April. This represents the fastest pace of inflation since 2023, signaling that consumer costs remain stubbornly high despite the Fed’s aggressive, multi-year rate-hiking campaign.
This hot inflation data has reinforced Wall Street expectations that the Federal Reserve will keep borrowing costs elevated well into next year, which is a negative factor for precious metals. Analysts at Dutch investment bank ING noted that markets remain highly cautious about whether the diplomatic progress will actually hold. They warned that if Middle East peace talks fail, higher energy costs will continue to fuel inflation risks. This would force central banks to keep interest rates higher for longer, directly dampening the appeal of non-yielding assets like gold.
Analysts estimate that the global gold market exceeds $150 billion in monthly transaction volume, with institutional and retail investors using the metal as a primary hedge against fiat currency devaluations. The recent economic turbulence has driven a 1.5% increase in total safe-haven allocations, as fund managers seek to protect their portfolios from the dual threats of a regional war and sticky inflation.
From a technical perspective, gold appears to be holding above some key support levels after testing its 200-day moving average and intermediate uptrend line. Prominent market research firms, including Yardeni Research, maintain a highly bullish long-term outlook on the precious metal. Analysts predict that once the Middle East conflict ends, the underlying upward trend will resume, reiterating long-term price targets of $5,500 by year-end and up to $10,000 by the end of the decade as global investors progressively rebalance into alternative assets.
As the trading week draws to a close, the immediate future of precious metals depends entirely on the outcome of the high-stakes Situation Room meeting. If President Trump signs the ceasefire and successfully reopens the Strait of Hormuz, declining energy prices and a weaker dollar will likely sustain gold’s upward momentum. However, if negotiations hit another roadblock, the return of geopolitical risk and fears of high inflation will likely trigger a sharp correction, forcing traders to navigate highly volatile trading ranges for the rest of the year.
