WASHINGTON (dpa-AFX) - Gold prices have soared on Friday amid rising optimism about an end to the Middle East war with the chances of reopening of the Strait of Hormuz and resumption of oil and energy trade growing stronger.
Front Month Comex Gold for August month delivery has jumped sharply by $61.1 (or 1.35%) to $4,593.50 per troy ounce.
Front Month Comex Silver for August month delivery has surged by $0.850 (or 1.12%) to $77.055 per troy ounce.
The U.S.-Israel versus Iran war entered day number 91 today.
Days before, U.S. Central Command conducted air strikes near Bandar Abbas, a port city in Iran on the Strait of Hormuz, targeting boats attempting to lay sea mines and missile-launching sites. U.S. forces claimed these were carried out as an act of 'self-defense.'
Yesterday, Iran's Islamic Revolutionary Guards Corps stated it struck a U.S. base that had served as the source for Bandar Abbas attack as retaliation.
Despite these military offensives, behind-the-door negotiations are ongoing to end the hostilities.
Since yesterday, positivity returned to markets following the prospects of a Memorandum of Understanding between the U.S. and Iran.
First reported by Axios and later confirmed by Al Jazeera, the MoU when signed by U.S. President Donald Trump would extend the current ceasefire over a period of 60 days to negotiate Iran's nuclear plans. The draft was awaiting Trump's final approval.
U.S. Treasury Secretary Scott Bessent indicated that there cannot be an agreement that does not meet Trump's red lines.
Yesterday, U.S. Vice President JD Vance stated that a deal was very close but was yet to be finalized and added that the U.S. was working on it. Vance sounded optimistic and stated that the U.S. is of the view that Iranians were negotiating in 'good faith'.
However, reports from Iran contradicted these developments. Citing a source close to the talks, Iran's Tasnim news agency denied any imminent agreement.
Iranian Parliament Speaker Mohammad Bagher Ghalibaf stated that Iran secures concessions 'with missiles' rather than negotiations.
Today through a lengthy post via Truth Social, Trump outlined his conditions on the framework agreement. While Trump acknowledged that the negotiations have advanced on lesser issues, he stated that key elements remain to be worked out.
Trump insisted that Iran must never develop or possess a nuclear bomb and repeated his call for unearthing enriched uranium material buried deep underground in Iran to be destroyed.
Trump also wanted the immediate reopening of the Strait of Hormuz to allow unrestricted shipping traffic with no tolls levied. Trump stated that Iran should remove or detonate all the sea mines it had planted earlier.
Promising to lift the U.S. naval blockade on Iranian ports if Iran complies with his demands, Trump added that he would make a 'final determination' after a meeting in the Situation Room of the White House.
Expectations of the resumption of oil and energy trade across the Strait of Hormuz nearly after three months' time have increased.
Yesterday, the crucial core Personal Consumption Expenditures index revealed a rise by 0.20% in April following a 0.30% increase in March. On a year-on-year basis, the core PCE rose by an expected 3.30%.
In addition, U.S. Labor Department data showed that the number of people claiming unemployment benefits rose by 5,000 to 215,000 over the third week of May and the continuing jobless claims increased to 1,786,000 for the week ending May 16 from 1,771,000 of the previous week.
WTI crude oil for July month delivery was last seen trading at $87.14, down by $1.76 (or 1.98%). The U.S. Dollar Index was last seen trading at 98.89, down by 0.10 points (or 0.10%).
The positivity over the eventual reopening of the Strait of Hormuz weighed on oil prices, contained the U.S. dollar value, and supported gold prices.
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