Gold extended its advance on Friday, with futures rising 0.87 per cent to $4,571.80 an ounce, as investors sought protection against an inflation backdrop that has turned hotter and a geopolitical picture that remains unresolved. The metal has been one of the standout performers of 2026, propelled by the combination of war in the Middle East, an energy-driven price surge and persistent demand from central banks diversifying away from the dollar.
Thursday's inflation data gave the rally fresh impetus. The April personal consumption expenditures index, the Federal Reserve's preferred gauge, rose to a 3.8 per cent annual rate, the hottest in nearly three years and well above the central bank's 2 per cent target. Accelerating inflation erodes the real return on cash and bonds and burnishes the appeal of a non-yielding asset whose value is not tied to any currency.
The Iran framework has cut both ways for the metal. Optimism that a deal will reopen the Strait of Hormuz has pulled oil prices down, which on its own would ease inflation pressure and reduce the case for gold. But the lack of a signature, and Vice-President Vance's acknowledgement that the sides are "not there yet," has kept a bid under haven assets, as investors hedge against the risk that the agreement unravels and the war-risk premium snaps back.
Silver, gold's more industrial cousin, was largely flat at $75.93 an ounce. The metal has tracked gold's broad uptrend through the year but with the additional volatility that comes from its heavy use in manufacturing, electronics and solar production, leaving it more sensitive to the growth outlook than to haven flows alone.
Central-bank buying has been a structural support beneath the gold price for several years, and the trend has if anything accelerated as reserve managers in emerging economies seek to reduce their exposure to dollar assets amid sanctions risk and geopolitical fragmentation. That steady official demand has provided a floor that has made gold's advances more durable than past cycles driven purely by speculative positioning.
For now the metal sits near the top of its historical range, caught between two forces: an inflation surge and policy uncertainty that argue for higher prices, and the prospect of an Iran deal that could cool both oil and inflation and sap some of the urgency from the haven trade. Which force wins out is likely to be settled, like so much else this week, by whether the memorandum in Washington is signed.