Gold prices moved higher in Asian trading on Wednesday, helped by a pullback in oil prices and a slightly weaker U.S. dollar. However, the upside remained limited as tensions in the Middle East continued to keep markets on edge.
Spot gold rose 1.8% to $4,553.55 an ounce by 03:19 ET (07:19 GMT). U.S. gold futures climbed 3.3% to $4,582.70.
Iran strikes continue even as U.S. claims negotiations occurred
Market sentiment shifted after reports emerged that the United States had delivered a 15-point proposal to Iran aimed at ending the ongoing conflict in the Middle East.
U.S. President Donald Trump said Washington was “in negotiations right now” with Iran, adding that Tehran was “talking sense” and appeared interested in reaching a peace agreement.
However, local media reports indicated that Israel launched strikes on Iran’s capital, Tehran, on Wednesday.
Earlier this week, Trump described talks with Iran as “productive,” although Iranian officials rejected those statements and said no negotiations were taking place.
Oil prices, which had surged in recent sessions amid fears of supply disruptions, declined on Wednesday but remained elevated.
The pullback in oil prices helped support gold by easing inflation expectations, which reduced pressure on central banks to maintain higher interest rates for an extended period.
Lower energy costs can also weigh on bond yields and weaken the dollar, both of which tend to support non-yielding assets such as gold.
The U.S. Dollar Index slipped 0.1% during Asian trading on Wednesday.
Inflation concerns had weighed on gold
Gold had faced significant pressure in recent sessions as rising oil prices and climbing bond yields fueled concerns about inflation and strengthened the U.S. dollar, triggering broad selling across precious metals.
Despite Wednesday’s recovery, analysts cautioned that volatility is likely to remain high, as markets continue to react strongly to headlines related to the Middle East conflict.
Among other precious metals, silver rose 3% to $73.41 per ounce, while platinum gained 2.2% to $1,977.60 per ounce.
Benchmark copper futures on the London Metal Exchange increased 1.2% to $12,264.33 per ton, while U.S. copper futures slipped 0.7% to $5.52 per pound.
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