Gold Prices Surge More Than 3% as Dollar Weakens and Iran Peace Hopes Grow
Gold prices rallied sharply on Wednesday after renewed optimism surrounding a potential peace agreement between the United States and Iran weakened the U.S. dollar and pressured oil prices lower, boosting demand for the precious metal.
By 09:38 ET (13:38 GMT), spot gold had surged 3.1% to $4,698.24 per ounce, while gold futures climbed 3.0% to $4,705.06 per ounce.
White House Reportedly Nearing Iran Peace Agreement
According to a report from Axios, the White House believes it is close to securing a preliminary agreement with Iran aimed at ending the ongoing conflict in the Middle East.
The proposed agreement reportedly involves a one-page memorandum of understanding that would establish the foundation for broader nuclear negotiations between Washington and Tehran.
U.S. officials expect Iran to respond to several key points within the next 48 hours. Although a final deal has not yet been reached, sources indicated this is the closest both sides have come to resolving the conflict since fighting erupted in late February.
Proposed Deal Could Ease Middle East Tensions
Under the potential agreement, Iran would reportedly pause nuclear enrichment activities, while the United States would lift sanctions and release billions of dollars in frozen Iranian assets.
The deal could also lead to the reopening of the Strait of Hormuz, restoring commercial and energy transit through one of the world’s most critical shipping routes.
An Iranian foreign ministry spokesperson confirmed that Tehran is currently reviewing the U.S. proposal. Pakistan, which has acted as a mediator between the two countries, also reportedly stated that negotiations are moving closer toward an agreement.
Earlier, U.S. President Donald Trump said progress was being made toward a potential accord and announced a temporary pause in operations intended to reopen the Strait of Hormuz.
Falling Oil Prices and Weaker Dollar Support Gold Rally
The possibility of easing geopolitical tensions pushed oil prices lower, with Brent crude futures dropping back below $100 per barrel. However, oil prices remain significantly above levels seen before the conflict began.
Lower oil prices have eased some investor concerns that central banks could aggressively raise interest rates to combat energy-driven inflation. Reduced expectations for tighter monetary policy improved the appeal of non-yielding assets such as gold.
At the same time, the U.S. dollar weakened against major global currencies. Throughout the Iran conflict, the dollar had benefited from safe-haven demand as investors viewed the U.S. economy as relatively insulated from energy supply disruptions due to its role as a major oil exporter.
Analysts Say Safe-Haven Demand Remains Strong
Max Baecker, president of American Hartford Gold, said the weaker U.S. dollar continues to support gold prices by making bullion cheaper for international buyers.
Baecker also noted that safe-haven demand for gold remains strong despite improving sentiment surrounding a possible Middle East peace agreement.
