Gold Prices Surge as Dollar Weakens and Middle East Tensions Ease
Gold prices moved sharply higher during Asian trading on Wednesday, supported by a weaker U.S. dollar and falling oil prices as signs of de-escalation in the Middle East reduced immediate inflation concerns.
Spot gold climbed 2.3% to $4,663.85 per ounce by 02:51 ET (06:51 GMT), while U.S. Gold Futures for June delivery gained 1.7% to $4,647.31.
The precious metal had already risen nearly 1% during the previous trading session.
Trump Signals Potential Iran Agreement
U.S. President Donald Trump said on Tuesday that Washington would pause operations aimed at restoring commercial shipping through the Strait of Hormuz, adding that a potential agreement with Iran was close.
The announcement marked a shift toward diplomacy after tensions escalated earlier this week. Trump’s “Project Freedom” initiative, designed to secure maritime trade routes through the strategic waterway, had previously triggered a military response from Iran and pushed oil prices significantly higher.
Falling Oil Prices Support Gold Market
Gold, which is traditionally viewed as a safe-haven asset, had recently faced pressure as rising energy prices increased inflation concerns and strengthened expectations that interest rates could remain elevated for longer.
Higher interest rates generally weigh on non-yielding assets such as gold.
However, oil prices extended their decline during Asian trading following Trump’s comments, easing fears of prolonged supply disruptions in global energy markets.
The decline in crude oil prices helped calm inflation expectations, providing fresh support for gold prices even as geopolitical risk premiums began to fade.
Analysts at ING noted that a more durable truce in the Middle East could lower energy-driven inflation risks and reduce the likelihood of additional Federal Reserve tightening, a scenario that would support non-yielding assets like gold.
Weaker U.S. Dollar Boosts Precious Metals
The U.S. dollar also weakened against major global currencies amid growing optimism surrounding a possible U.S.-Iran agreement.
A weaker dollar typically makes gold more affordable for international buyers using other currencies, helping increase demand for the precious metal.
The U.S. Dollar Index declined 0.4% during Asian trading hours.
Among other precious metals, silver prices surged 4% to $75.73 per ounce, while platinum advanced 2.2% to $2,000.40 per ounce.
Copper Prices Also Move Higher
Industrial metals also posted gains during the session.
Benchmark copper futures on the London Metal Exchange climbed 1.5% to $13,289.78 per ton, while U.S. copper futures rose 1.7% to $6.09 per pound.
