Gold prices remained broadly stable on Wednesday as investors balanced concerns over rising bond yields and a stronger dollar against optimism that diplomatic progress could eventually ease the conflict between the United States and Iran.
At 05:15 ET (09:15 GMT), spot gold traded little changed at $4,480.57 an ounce, while gold futures fell 1.6% to $4,482.80 an ounce.
Higher Treasury yields weigh on gold sentiment
Analysts at Phillip Capital warned that an increase in oil prices linked to the Iran conflict could spark renewed global inflationary pressure and potentially push central banks toward further interest-rate hikes.
Government bond yields have risen sharply in recent days as investors reassessed inflation risks. The yield on the 30-year U.S. Treasury bond — widely regarded as a benchmark for long-term economic expectations — climbed to levels last seen during the global financial crisis nearly twenty years ago. Bond prices generally move inversely to yields.
Rising interest rates tend to reduce demand for non-yielding assets such as gold. Meanwhile, the U.S. dollar remained close to a six-week high, increasing the cost of bullion for foreign buyers.
Investors are also looking ahead to the release of minutes from the Federal Reserve’s April meeting later on Wednesday for additional guidance on the future path of U.S. monetary policy.
Diplomatic hopes continue to support markets
Despite ongoing geopolitical tensions, markets remain hopeful that Washington and Tehran may eventually negotiate an end to the conflict that has persisted for more than two months.
U.S. President Donald Trump told lawmakers on Tuesday evening that the Iran war could end “very quickly.” Trump also said earlier this week that he had delayed additional military strikes against Iran following requests from three Gulf nations.
Vice President JD Vance also struck a positive tone, saying Iran appeared interested in reaching an agreement.
Reuters separately reported that two Chinese oil supertankers exited the Strait of Hormuz on Wednesday, citing vessel-tracking data from LSEG and Kpler. The South Korean tanker Universal Winner was also leaving the strategically important passage near Iran’s southern coast, which has been largely closed to tanker traffic since the conflict between the United States, Israel and Iran escalated in late February.
Oil prices declined as traders grew increasingly optimistic that energy shipments through the Strait of Hormuz may gradually recover. Even so, Brent crude prices remain significantly higher than levels recorded before the conflict began.
“The prospects for U.S.-Iran negotiations remained uncertain, with Iran insisting on its core demands and Trump signaling a possible renewed strike on Iran,” said Neil Welsh, Head of Metals at Britannia Global Markets, in a note.
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