Gold has drifted higher and headed for a weekly gain as optimism over a potential end to the US-Israel war on Iran helped ease concerns about inflation and elevated interest rates, Al Jazeera reports.

Spot gold has added 0.5 per cent at $4,709.89 per ounce by 1551 GMT and gained 2.1pc this week. US gold futures have increased 0.2pc to $4,719.60.

Gold, typically seen as a haven during periods of global turmoil, faces pressure in a higher interest-rate environment because of its non-yielding nature.

“Gold is trading like a risk asset rather than a safe haven. The rebound in gold is tied to the prospects of de-escalation in Iran. With energy prices coming down, we’re seeing the prospects for Fed rate cuts increase down the road,” says David Meger, director of metals trading at High Ridge Futures, referring to the US Federal Reserve.