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Gold is a positive, as oil prices drop and hopes for Iran talks fade

Gold prices rose Friday, reversing losses of more than 1% earlier, amid hopes for a breakthrough in the Iran war. According to reports, Tehran had submitted a revised proposal for negotiation, which eased inflation fears.

At 10:36 am, spot gold rose 0.3% to $4.636.72 an ounce. ET (1436 GMT), after having fallen as low as $4,59.48 in earlier sessions. The stock was still on course for a weekly loss of 1.6%.

U.S. Gold Futures for June Delivery rose 0.4% to $4649.60.

The potential 'peace breakthrough', as Iran has signaled that it is willing to resume talks, likely boosted risk appetite among investors, pushed the U.S. dollar index and pushed gold prices higher. "The potential?peace breakthrough, with Iran signalling that it wants to talk again, probably boosted investor risk appetite and pressured the?U.S. dollar index," said Jim Wyckoff.

Dollars are cheaper to buyers of other currencies.

IRNA, the Iranian state news agency, reported that Iran had sent its latest proposal for negotiations with America to Pakistani mediators.

The news caused oil prices to drop, but they were still on track to make weekly gains. This is continuing the trend of fuel prices rising and fueling concerns about an economic slowdown in the world.

Central banks could be prompted by rising costs to keep interest rates high for longer. This would put pressure on assets that do not yield, such as gold, as investors look at alternatives like Treasury yields.

The U.S. 'Federal Reserve' kept interest rates the same this week, and struck a hawkish stance that caused?markets to abandon expectations of a rate reduction this year.

The price of gold has fallen significantly since the beginning of the Iran conflict, in late February. This is despite its traditional role as a hedge against geopolitical uncertainties.

Silver prices have risen 3.4%, to $76.26 an ounce.

Ole Hansen is the head of commodity strategy for Saxo Bank. He wrote: "Long-term prospects (for silver), remain supported by a sixth consecutive year's market deficit.

Palladium rose 0.9%, to $1,537.12, while platinum was up by 0.8%. (Reporting by Anjana Anil in Bengaluru. (Editing by Nia William and Mark Potter.

(source: Reuters)