Spot gold rose 1% to $4,717.82 per ounce by 0712 GMT, marking its strongest level since March 20. U.S. gold futures for April delivery jumped 1.4% to $4,744.30. The softer dollar, down 0.4%, made bullion more affordable for buyers using other currencies.
Trump indicated that Tehran would not need to make a deal as a prerequisite for a resolution and promised an update on Iran during a Wednesday evening address.
“Talks that the U.S. might wrap up the war in two to three weeks, even if the Strait of Hormuz remains closed, reinvigorated U.S. equity markets overnight and pulled gold higher along with it,” said Marex analyst Edward Meir.
Gold had suffered its steepest monthly decline since October 2008 in March, falling more than 11% as rising oil prices stoked inflation concerns and heightened expectations of tighter monetary policy. Despite hopes for de-escalation, oil prices continued to rise Wednesday due to infrastructure damage that is likely to constrain supply.
“Market participants remain cautious about over-interpreting the de-escalation remark as a clean pivot… We’ve already seen multiple rounds where talks appeared constructive before stalling,” said Christopher Wong, a strategist at OCBC.
Investors have nearly ruled out any U.S. rate cuts this year, a sharp reversal from expectations for two cuts before the onset of the conflict. High interest rates typically reduce gold’s appeal as a non-yielding asset, even as the metal is often seen as a hedge against inflation and geopolitical risk.
“Should geopolitical tensions ease further, expectations for Federal Reserve easing could return. In that scenario, real yields can decline, supporting gold,” Wong added.
Other precious metals were mixed: spot silver dipped 0.1% to $75 per ounce, platinum gained 1.4% to $1,975.74, and palladium rose 1% to $1,487.26.
This movement highlights how geopolitical developments and central bank policies continue to drive volatility in the precious metals market.