Gold Price Jumps as Trump Says Iran Deal Could Come “Within a Week” — But Markets Aren’t Sure

TLDR

• Gold climbed up to 1.3%, topping $4,540 an ounce on Tuesday
• Conflicting signals from the US and Iran over peace talks drove the move
• A drop in oil prices eased inflation fears, giving gold a boost
• US manufacturing expanded in May at its fastest pace in four years
• Gold remains about 14% below its pre-war level from late February

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Gold prices rose on Tuesday as traders reacted to confusing and conflicting reports about peace negotiations between the US and Iran.

Spot gold climbed 1% to $4,528.93 an ounce in London trading. At its peak, gold rose as much as 1.3%, briefly topping $4,540 an ounce.

The gains came after a sharp drop in the previous session. That drop followed reports that Iran had stopped sending messages to the US through mediators.

Iran’s move came in response to increased Israeli military activity against Hezbollah in Lebanon. The development raised fears that the Strait of Hormuz could remain closed for a longer period.

The Strait of Hormuz is a critical waterway for about a fifth of the world’s oil supply. Its continued closure has fueled a global energy crisis now in its fourth month.

On Tuesday, oil prices dipped after surging the day before. That pullback in oil helped ease fears of an energy-driven inflation spike.

“Oil is trading softer following yesterday’s price surge and that has fueled a fresh upside push in gold,” said Ole Hansen, head of commodity strategy at Saxo Bank.

Trump and Netanyahu Offer Different Accounts of Talks

US President Donald Trump said on Monday that peace talks with Iran were continuing “at a rapid pace.” He told ABC News he believed a deal could happen “over the next week.”

Top Iran News (courtesy of @Newsquawk)

US President Trump told ABC News he thinks he will have an agreement with Iran to extend the ceasefire and reopen the Strait of Hormuz over the next week, while he also stated that a peace agreement with Iran could be better than a military…

— zerohedge (@zerohedge) June 2, 2026

Trump also said there had been “a little glitch,” pointing to Iran’s objection to Israeli actions in Lebanon as the likely cause of the pause in communications.

Israel and the US launched a joint assault on Iran in late February. Israel has also sent military forces into southern Lebanon as part of the broader conflict.

Lebanon announced a partial ceasefire between Hezbollah and Israel, but Lebanon’s embassy in Washington said it would not end the fighting. Israel’s military said it intercepted two projectiles fired from Lebanon on Tuesday.

Trump and Israeli Prime Minister Benjamin Netanyahu gave different accounts of a phone call about the situation in Lebanon, adding to the confusion around the state of negotiations.

Manufacturing Data Complicates Rate Cut Outlook

Despite gold’s rise, some analysts are cautious about where prices go from here.

US manufacturing activity expanded in May at its fastest pace in four years. It was the fifth straight month of growth, which may give the Federal Reserve less reason to cut interest rates.

Lower interest rates typically support gold because the metal pays no interest. If rates stay higher for longer, that could weigh on prices.

“The outlook for gold remains contingent on developments in the Middle East,” said Rhona O’Connell of StoneX Financial. She added that prices are likely to remain range-bound, “potentially with a downward bias on the back of interest-rate expectations.”

Gold is still roughly 14% below its level just before the conflict began in late February. Silver gained 2.1% to $76.42 an ounce, while platinum and palladium also rose on Tuesday.