Precious metals pushed to their highest levels in more than a week on Thursday as traders weighed a fragile diplomatic opening between Washington and Tehran against a Federal Reserve that is signaling no imminent relief on rates. Gold opened at $4,702.20 per troy ounce — its strongest start since April 27 — and was last trading $33.80 higher, or 0.72%, at $4,728.10, after a session range of $4,694.00 to $4,729.10. Silver opened at $77.83 per ounce, the highest level since April 23, and had pushed as high as $80.87 by 6:35 a.m. ET.
Iran Reviews One-Page U.S. Memorandum
The catalyst is a one-page memorandum of understanding the Trump administration delivered to Tehran, which is now under formal review by Iranian officials. According to reporting from CNN and NPR, the framework would have Iran ease its grip on the Strait of Hormuz while the United States gradually lifts the naval blockade it imposed on April 13, with the wind-down spread across roughly 30 days. The MoU is meant to clear the way for a more comprehensive nuclear deal in a later phase.
Iranian officials said Wednesday they would route their response through Pakistan, which is acting as mediator. "If an agreement is reached in Pakistan, it would be an honour for us," a Pakistani official told reporters Thursday. U.S. Central Command said its blockade had turned around 52 vessels through Wednesday, underscoring how disruptive the current posture has been for global shipping flows that normally move roughly a fifth of the world's seaborne oil.
Why Metals Are Rising Into the Diplomacy
The instinct on a peace headline is to sell safe havens, but the move higher in gold and silver reflects a more complicated mix. The MoU is still on Tehran's desk — not signed — and any 30-day unwind of the blockade leaves a long window for the deal to slip. Traders are also covering hedges into a thin physical market, where silver in particular has been squeezed by industrial demand.
Beneath the geopolitics, the macro backdrop is doing some of the work. The dollar has softened off recent highs, and gold tends to firm whenever the greenback eases, since dollar-priced bullion becomes cheaper for foreign buyers.
Warsh Fed Looms Over the Rally
The cap on this rally is the changing of the guard at the Federal Reserve. Kevin Warsh, who is poised to succeed Jerome Powell as chair, used his Senate Banking Committee confirmation hearing to push back hard on the idea he was being installed to cut. "The president never asked me to commit to interest rate cuts. He did not demand it," Warsh told senators — a notably hawkish posture given President Trump's public demands for immediate easing.
Markets have absorbed the signal. The CME FedWatch tool now shows no more than one rate cut for all of 2026, and a Reuters poll found 56 of 103 economists expect rates to hold steady through September. Bloomberg reported Tuesday that swaps tied to Fed policy are pricing better than a 50% chance the next move is a hike — by April of next year — before any cut materializes.
For gold, that mix is unusual: a metal rallying on geopolitics while real yields and the dollar should be working against it. If the MoU stalls, the safe-haven bid stays. If Tehran signs and the blockade lifts, the Warsh-led Fed becomes the dominant story — and the path of least resistance flips.
What to Watch Next
- Tehran's response through Pakistani channels in the coming days
- April CPI on May 12 — the first inflation print into the Warsh transition
- Hormuz shipping data for any sign vessel turnarounds are easing
- Dollar index — a break below recent support would extend the metals bid
Sources: Yahoo Finance / Fortune (gold and silver prices May 7, 2026), CNN (Iran MoU live updates), NPR (Strait of Hormuz coverage), Bloomberg (Warsh Fed rate expectations), Reuters (economist poll on Fed policy).