Khaberni - Gold slightly increased on Friday, compensating for previous losses that exceeded 1%, amid hopes of achieving a breakthrough to end the war in Iran after Tehran submitted a new negotiation proposal, easing some concerns about inflation.
Gold reached $4627.63 per ounce by 17:50 GMT after dropping to a session low of $4559.48 earlier.
However, the precious metal is still on track to post a weekly loss of 1.7%.
U.S. gold futures for delivery in June rose by 0.4%, reaching $4649.60.
Chris Gaffney, head of global markets at EverBank, said, "The positive news regarding negotiations to end the war with Iran contributed to the recovery of gold prices from their early morning losses."
He added, "Ending the war with Iran could lead the Federal Open Market Committee to cut interest rates again, which would result in a decrease in the dollar's value, having a positive impact on gold prices."
The dollar fell against a basket of major currencies, making gold priced in U.S. dollars cheaper for holders of other currencies.
Iranian state media and a Pakistani official reported that Iran has presented its latest propositions for negotiations with the United States.
Oil prices dropped following that news, although they are still on track for weekly gains, increasing concerns about a global economic slowdown and rising inflation with higher fuel prices.
The rising costs may prompt central banks to keep interest rates high for a longer period, burdening assets that do not generate income like gold, as investors turn to alternatives such as Treasury bonds.
This week, the Federal Reserve (the U.S. central bank) kept interest rates unchanged.
Gold prices have fallen since the start of the war in Iran in late February, despite its traditional role as a hedge against geopolitical instability.
For other precious metals, silver rose by 3% in the spot market to $75.91 per ounce, platinum increased by 0.3% to $1992.05, and palladium went up by 0.6% to $1532.79.
