Gold prices rose during Friday's Asian trade as investors assessed developments surrounding the fragile ceasefire between the United States and Iran while awaiting the closely watched U.S. nonfarm payrolls report.
By 4 pm AEST (6 am GMT), spot gold prices had climbed 0.7% to US$4,721.74 per ounce, recovering after a late pullback in the previous session and moving back towards recent 12-day highs near $4,765.
Market sentiment improved after both Washington and Tehran signalled support for maintaining the ceasefire despite renewed military exchanges in the Strait of Hormuz on Thursday.
The easing in geopolitical tensions reduced demand for the U.S. dollar as a safe-haven asset, providing additional support for gold prices.
Despite the renewed confrontation, investors remained optimistic that Tehran could eventually accept Washington’s proposal aimed at ending the conflict and reopening negotiations.
Attention has now shifted towards the upcoming U.S. employment report, which investors see as critical for determining the outlook for Federal Reserve interest rate policy.
Markets expect that the U.S. economy added 62,000 jobs in April following a stronger-than-expected increase of 178,000 jobs in March.
The unemployment rate is forecast to remain unchanged at 4.3%.
The labour market data is expected to provide further insight into whether the U.S. economy remains resilient enough for the Federal Reserve to maintain current policy settings or whether slowing employment growth could strengthen the case for future interest rate cuts.
