Gold Flat, Silver Up; US-Iran Negotiations, Rate Hike Fears in Focus

 

Gold Flat, Silver Up; US-Iran Negotiations, Rate Hike Fears in Focus

(Bullion News Network) – Precious metals moved little on Friday as markets digested more back-and-forth between the U.S. and Iran, as well as a lingering fear that the FOMC may vote to raise interest rates at one of its upcoming meetings. The spot price of gold barely moved to end the trading week, adding less than $2 per troy ounce. The metal remains near a recent low, with $4,200/ozt remaining as a shaky support. Silver showed a bit more movement, gaining just over $0.50 per troy ounce. The price action favored silver, driving the gold-silver ratio lower.

Geopolitics in the Middle East remained a major point of interest for investors on Friday. U.S. President Donald Trump threatened to resume large-scale military operations against Iran on Wednesday but said in a Truth Social post that these strikes were being canceled on Thursday.

Based on the fact that discussions with the Islamic Republic of Iran have been brought to the highest level of Iranian leadership and approved, I have, as President of the United States of America, cancelled the scheduled strikes and bombings against Iran this evening. Discussions and final points have been, in both concept and great detail, approved by all parties involved[.]”

The American leader ripped Iran’s leadership on Friday during a separate Truth Social post after Iranian state media reportedly leaked information about the proposed deal between Tehran and Washington.

The terms that Iran leaked out to the Fake News have NOTHING to do with the terms that were agreed to, in writing. What they said, including their weak and pathetic statement on having a deal, bears no relation to the truth. Very dishonorable people to deal with. With them, there is no such thing as dealing in good faith. AMAZING! Also, their totally rebuffed Drone strike last night against Indian Ships leaving the Hormuz Strait is TOTALLY UNACCEPTABLE. They better get their act together, and FAST!

Much of the conflict between negotiators seems to involve whether the U.S. will offer cash to Iran as part of a long-term peace deal. U.S. Vice President JD Vance said on Friday that Iran will not be “receiving any cash” under the current proposed agreement. News agencies, including the New York Times, reported on Thursday that the proposed deal included $300 billion for Tehran as part of a reconstruction investment fund.

Once again, the back-and-forth leaves the prospects of reopening the Strait of Hormuz unclear. Wall Street ended the week optimistic, buoyed by a record-setting IPO for SpaceX and bolstered by Iran deal hopes. Crude oil futures retreated on Friday, falling nearly 4% per barrel as Pakistani Prime Minister Shehbaz Sharif said in an X post that a “final, agreed upon text of the peace deal has been reached”.

The optimism did not translate in the precious metals market. Gold and silver managed to end the day in the green, but only silver managed to erase its losses after a market-wide dip on Wednesday. 

Meanwhile, investors are still trying to make sense of conflicting signals in the U.S. economy. The May U.S. employment report shattered expectations, but inflation data from the same month suggests that consumer prices have continued to rise. These signals have led some analysts to adjust their expectations for when – and if – the federal interest rate may begin coming down.

CME FedWatch now projects a 6.3% probability that the Fed will vote to raise interest rates by its July meeting. This projection jumps to 28.2% for the September meeting and 37.7% for October. Overall, market expectations anticipate zero rate cuts for the remainder of 2026.

That being said, investors should anticipate quite a bit more speculation surrounding the Federal Reserve in the coming months. Kevin Warsh, Trump’s pick for Fed chair who was sworn in last month, is expected to face substantial pressure from the White House to cut interest rates. Trump repeatedly criticized former chair Jerome Powell for refusing to cut interest rates throughout 2025 and early 2026.

Warsh has inherited a historically divided Federal Open Market Committee (FOMC), as well as an economic situation that may make it difficult to find consensus in easing economic policy. The April FOMC meeting saw four dissents, the highest number since 1992. Three of these dissenters disagreed with the “rate cut bias” present in the final decision statement, a move that some analysts read as a message to Warsh that they do not plan to be persuaded into cutting rates prematurely.

Cutting interest rates is considered an inflationary action, and committee members will likely be cautious in easing economic policy until inflation is firmly under control. Likewise, strength in the American labor market could justify a rate hike from the FOMC in order to drive consumer prices lower.

Rate cut speculation played a major role in gold’s historic 2025 run, but 2026 has seen the safe haven demand driver take a backseat, namely due to the lack of rate cuts on the docket and a healthy dose of geopolitical crises taking up investors’ headlines. This could change on a dime, especially if a US-Iran deal is officially confirmed and inflation remains sticky heading into the rest of the year.

Next week will be a shortened trading week due to the Juneteenth holiday on Friday.