Gold Extends Rally as Dollar Weakens and Iran De-Escalation Hopes Grow
Gold prices continued their upward momentum for a fourth consecutive session during European trading on Wednesday. The move was supported by a weaker U.S. dollar and growing optimism that the United States and Iran could move toward ending the ongoing Middle East conflict.
Spot gold rose 1.4% to $4,737.22 per ounce by 09:32 ET (13:32 GMT), while U.S. gold futures gained 1.8% to $4,763.34 per ounce.
Strong Rebound After Recent Volatility
The precious metal surged 3.5% in the previous session as the dollar weakened significantly. However, despite the recent rebound, gold recorded a sharp decline of more than 11% throughout March, highlighting ongoing volatility in the market.
Trump Signals Possible U.S. Exit From Iran Conflict
Gold prices were further supported after U.S. President Donald Trump stated that the U.S. could withdraw from the Iran conflict within the next two to three weeks. These remarks increased expectations of a potential de-escalation, although uncertainty around the timeline and terms of any agreement continues to weigh on investor sentiment.
On the Iranian side, President Masoud Pezeshkian indicated that Tehran is open to ending the conflict, while emphasizing the need for guarantees to prevent future attacks.
Weaker Dollar Boosts Gold Demand
The decline in the U.S. dollar provided additional support for gold, making it more attractive to international buyers. The U.S. Dollar Index, which measures the greenback against a basket of major currencies, fell by 0.5%.
Oil Prices and Inflation Expectations Ease
Hopes for reduced tensions also contributed to a pullback in oil prices, although they remain elevated compared to pre-conflict levels. Lower energy prices may help ease inflation concerns, reducing pressure on central banks to adopt more aggressive interest rate hikes.
Since gold does not yield interest, it typically underperforms in high-rate environments, making inflation and monetary policy expectations key drivers for its price.
Investors Await Key U.S. Economic Data
Market participants are now focusing on upcoming U.S. economic indicators, particularly the nonfarm payrolls report due on Friday. The data could provide further clues on the Federal Reserve’s policy path and influence both currency and commodity markets.
Mixed Performance Across Precious Metals
Among other precious metals, silver slipped 0.4% to $74.85 per ounce, while platinum rose 1.2% to $1,976.83 per ounce, reflecting mixed sentiment across the sector.
