Gold prices reached a two-week high on Thursday, supported by a weaker dollar and declining oil prices amid cautious optimism over a potential peace agreement between the United States and Iran. Spot gold rose 1 percent to $4,735.32 per ounce by 0934 GMT, marking its highest level since April 23. Meanwhile, US gold futures for June delivery advanced 1.1 percent to $4,745.90.

The decrease in oil prices contributed to the rising gold prices by driving up bond prices, which in turn lowered yields. Benchmark 10-year US Treasury yields declined, easing the opportunity cost associated with holding non-yielding assets like gold. The US dollar remained near its lowest level in over two months, making gold relatively cheaper for investors using other currencies.

In addition to gold, other precious metals showed gains. Spot silver increased 3.4 percent to $79.93 per ounce. Platinum climbed 1.2 percent to $2,085.70, while palladium rose 1 percent to $1,553.16.

Market expectations for US Federal Reserve interest rate hikes also diminished, with the probability of an additional rate increase by December falling to approximately 12 percent from 16 percent the previous day, according to data from CME Group’s FedWatch tool.

The shifts in these key economic indicators reflect broader market sentiment easing concerns over inflation and tightening monetary policy as diplomatic developments regarding US-Iran relations continue to unfold.