Spot gold rose 0.6 per cent to $4,819.66 per ounce as of 1207 GMT, building on gains from the previous session when it touched a one-month high. U.S. gold futures for June delivery also advanced, climbing 0.4 per cent to $4,841.70.
Market analysts say the precious metal is regaining support after facing downward pressure in March, when heightened geopolitical tensions triggered a rush for liquidity. According to Nitesh Shah, a commodity strategist at WisdomTree, that phase has largely passed, allowing gold to stabilise.
He added that underlying concerns — including questions around central bank independence and risks tied to dollar debasement — are likely to keep gold prices well supported in the near term.
Investor confidence was further boosted by diplomatic developments pointing to a possible end to the Middle East conflict. Reports indicate renewed mediation efforts in Tehran, alongside signals from the administration of U.S. President Donald Trump suggesting progress toward a deal that could reopen the strategic Strait of Hormuz.
Oil markets reflected the shifting sentiment, with crude prices rising more than 1 per cent on the day but remaining comfortably below the $100-per-barrel threshold. Analysts at ING Group noted that softer oil prices are helping to ease inflationary pressures that had previously weighed on gold.
Global equities also responded positively, with major indices in Asia climbing to fresh record highs amid optimism surrounding a potential peace agreement.
Gold had previously dropped to a low of $4,097.99 per ounce on March 23, as surging energy prices fueled inflation fears and increased expectations of tighter monetary policy by the U.S. Federal Reserve — typically a negative factor for non-yielding assets like gold.
However, the outlook has since shifted. Investors are now pricing in a more than 34 per cent chance of at least one U.S. interest rate cut by the end of 2026, according to data from CME’s FedWatch Tool, reflecting a modest but notable increase from the previous day.
Other precious metals also recorded gains. Spot silver rose 0.7 per cent to $79.59 per ounce, platinum climbed 1.5 per cent to $2,141.45, while palladium added 0.8 per cent to $1,586.05, mirroring the broader positive momentum across commodity markets.