Gold Surges as Iran Talks Weaken Dollar, Ease Inflation Fears

Gold traded above $4,800 an ounce on Wednesday after rising about 2% in the previous session, supported by hopes that the US and Iran can strike a deal to end the conflict, easing fears of an energy-led inflation shock. Washington and Tehran are reportedly working to schedule a second round of peace talks in the coming days after last weekend’s negotiations collapsed. The US is continuing its naval blockade of Iranian oil exports in the Strait of Hormuz, while Iran is considering a temporary suspension of shipments through the route to help advance a potential agreement. Meanwhile, crude oil retreated below $90 per barrel and the dollar index slipped to a six-week low, lending further support to gold. Markets have also dialed back hawkish expectations for monetary policy, with the Federal Reserve adopting a wait-and-see stance as it evaluates inflation risks.

Gold climbed to $4,800 per ounce on Tuesday, its highest level since March 18, as progress in US-Iran negotiations weighed on the dollar and pushed oil prices below $100 a barrel, easing inflation concerns. Although weekend talks failed to yield an agreement and the Strait of Hormuz blockade took effect, US officials signaled plans for further negotiations before the two-week ceasefire expires. The dollar fell to a one-month low, and crude prices retreated on hopes for a longer-term deal, reducing fears of sustained inflation and rate hikes. Markets now price in a nearly 30% chance of a Fed rate cut this year. Despite the rally, gold remains about 10% below its pre-conflict level.

Gold climbed toward $4,800 per ounce on Tuesday, rebounding from the previous session’s losses as the US and Iran signaled willingness to resume negotiations aimed at securing a longer-term ceasefire before the current two-week truce lapses. President Donald Trump said Tehran had reached out to Washington just hours after the US initiated a naval blockade on Iranian oil shipments in the Strait of Hormuz. Iranian President Masoud Pezeshkian also indicated readiness to continue peace discussions, provided they remain within the framework of international law and regulations. Oil prices retreated on hopes for a potential longer-term deal, easing inflationary concerns and tempering expectations that central banks will keep interest rates on hold or even hike them. Despite the uptick, gold is still down roughly 10% since the conflict began.