Gold rises as Middle East optimism calms inflation fears

Gold prices rose on Thursday as growing optimism about a possible end to conflicts in the Middle East calmed inflation worries and improved prospects for lower interest rates, reports Reuters.

Spot gold rose 0.6 per cent to $4,819.66 per ounce by 1207 GMT, after rising to a one-month high in the previous session. US gold futures for June delivery gained 0.4 per cent to $4,841.70.

"For the month of March, gold was under pressure because of the need for liquidity in the metal following the war, but that is kind of mostly run its course, that need for liquidity," said Nitesh Shah, commodity strategist at WisdomTree.

Shah added that he expects gold prices to remain very well supported as concerns surrounding central bank independence and dollar debasement risk remain prevalent. Optimism grew on Thursday that the war in the Middle East may be near its end, with a key Pakistani mediator in Tehran and the administration of US President Donald Trump talking up hopes for a deal that would open the crucial Strait of Hormuz.

Crude oil prices were up more than 1 per cent on Thursday, but remained well below the $100-a-barrel mark.