Gold prices edged lower in Asian trading on Wednesday, pulling back from a one-month peak as investors focused on whether Washington and Tehran will resume negotiations ahead of a ceasefire deadline next week.
The metal had rallied strongly in the previous session, supported by improved risk sentiment after U.S. officials pointed to the possibility of further ceasefire discussions with Iran. Softer U.S. producer inflation data also helped calm concerns about the path of interest rates.
Spot gold slipped 0.6% to $4,815.17 an ounce, while gold futures declined 0.3% to $4,838.40/oz by 02:23 ET (06:23 GMT).
Other precious metals also moved lower, with spot silver down 0.4% to $79.2715 an ounce, while platinum held steady at $2,107.21 an ounce.
Gold buoyed by softer inflation and weaker dollar
Gold had climbed to a one-month high on Tuesday after U.S. producer price index (PPI) data for March came in below expectations.
Broader metals prices also advanced as the dollar weakened following the inflation release.
The PPI data mirrored trends seen in consumer price figures, with headline inflation pushed higher by energy costs, while core inflation showed only modest gains.
This dynamic weighed on the dollar and strengthened expectations that the Federal Reserve may have room to lower interest rates later in the year.
Reinforcing this view, former Federal Reserve Chair and U.S. Treasury Secretary Janey Yellen said she sees scope for a rate cut in 2026.
Lower borrowing costs tend to support non-yielding assets such as gold by reducing the relative appeal of government bonds.
Geopolitics remain key as Iran blockade intensifies
Markets turned cautious as oil prices rebounded on Wednesday after the U.S. military confirmed it had fully implemented a naval blockade on Iran, seen as an effort to pressure Tehran into reaching a peace agreement.
U.S. President Donald Trump said he expects additional ceasefire talks within the next two days and indicated that the conflict could be nearing an end.
The war, now entering its seventh week, has weighed on gold’s performance, as concerns over inflation driven by higher energy prices have dampened its safe-haven appeal.
At the same time, reports suggest both sides remain open to continued dialogue, particularly ahead of the fragile ceasefire set to expire next week. As of Wednesday morning, the truce appeared to be holding.
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