Gold prices rose to their highest level in three weeks on Wednesday as the U.S. dollar weakened following President Donald Trump’s announcement of a two-week ceasefire with Iran, halting planned strikes on the country’s civilian infrastructure.
Spot gold gained 2.7% to $4,832.51 per ounce by 02:36 ET (06:36 GMT), marking its strongest level since March 19.
U.S. gold futures also climbed 2.7% to $4,857.25 per ounce.
Other precious metals followed the upward move. Silver jumped 6% to $77.38 per ounce, while platinum advanced 4.2% to $2,044.60 per ounce.
Trump pauses military action against Iran for two weeks
In a social media message, Trump said the United States would suspend military operations against Iran for a two-week period, noting that Washington had already achieved its main military objectives.
The statement came less than two hours before a deadline of 8:00 p.m. ET that investors had been watching closely as a potential flashpoint for a wider escalation.
Earlier in the day, Trump warned that “a whole civilization will die tonight” if Iran failed to meet U.S. demands.
The ceasefire was secured following last-minute diplomatic efforts led by Pakistan and is conditional on Iran guaranteeing the safe reopening of the Strait of Hormuz, a crucial route for roughly 20% of global oil shipments.
Iran also signaled that it could reduce tensions during the ceasefire period, saying safe passage through the Strait would be possible if hostilities stop and vessels coordinate movements with Iranian authorities.
Trump also said on Wednesday that the United States would assist in easing the congestion of tanker traffic that has built up in the Strait.
Oil falls sharply, dollar weakens
Financial markets reacted quickly to the developments. Oil prices dropped more than 15%, risk assets rallied and the U.S. dollar came under pressure.
The U.S. Dollar Index slipped nearly 1% during Asian trading on Wednesday, making bullion cheaper for investors using other currencies.
Although gold is typically viewed as a safe-haven asset, it struggled last month as oil prices surged sharply. The rise in energy costs fueled inflation concerns and strengthened expectations that the U.S. Federal Reserve might keep interest rates higher for longer.
Investors are now looking ahead to the U.S. March consumer price index (CPI) report due on Friday, which is expected to offer the first clear indication of how the recent spike in energy prices is feeding into inflation.
Economists expect headline inflation to have accelerated on a monthly basis, driven largely by higher fuel prices, which could complicate the outlook for Federal Reserve policy.
In industrial metals, benchmark copper futures on the London Metal Exchange rose 2.8% to $12,691.33 per ton, while U.S. copper futures gained 2.7% to $5.74 per pound.
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