Gold Surges on Hopes for Middle East Peace

Gold prices have surged on Friday, setting the stage for their strongest weekly gain since January. The precious metal rose by 0.6% to $4,262.39 per ounce as of 04:21 GMT, with silver climbing 1.3% to $62.27 per ounce and platinum gaining 0.5% to $1,737.25.

According to Matt Simpson, a senior analyst at StoneX, the rally is due to hopes for peace in the Middle East, which have lowered inflation expectations and allowed gold to break above the $4,000 level.

The drop in oil prices has also contributed to the rise of gold, as lower energy prices ease inflation concerns and reduce expectations that interest rates will remain higher for longer. The U.S. Labor Department's July nonfarm payrolls report is set to be released at 12:30 GMT, which could provide some volatility in the near term.

Despite this, Simpson believes that gold is on a strong upward trajectory, with $4,000 proving to be a solid support level and bulls waiting for dips to take advantage of a correction higher towards $4,600. Traders currently see a 55% chance of a U.S. interest rate hike in September, down from 63% a week earlier.