Gold staged a sharp rebound on Wednesday, climbing as much as 2 percent before settling 1.6 percent higher at $4,545.34 an ounce by 07:51 GMT, its strongest one-day gain in weeks.
The precious metal had sunk to a four-month low of $4,097.99 just two days earlier, battered by a stronger dollar and fears that prolonged Middle East conflict would keep oil — and therefore inflation — elevated.
U.S. gold futures for April delivery jumped even more aggressively, rising 3.3 percent to $4,545.20, reflecting brisk buying from both speculative funds and jewelers in Asia.
The immediate catalyst was a double-barreled relief rally. The dollar eased against a basket of major currencies, making dollar-denominated bullion more attractive to buyers holding euros, yen, and rupees. At the same time, crude oil prices tumbled after U.S. President Donald Trump told reporters Tuesday that Washington was “making very good progress” in negotiations to end the conflict with Iran.
Tehran pushed back hard on Wednesday. Iran’s military dismissed Trump’s statement outright, saying the Americans “are negotiating with themselves.” The dueling claims kept risk sentiment fragile and prevented a wholesale flight out of safe-haven assets, but the mere prospect of lower energy prices was enough to cool inflation worries that had been weighing on gold.
With oil now retreating, traders dialed back bets on aggressive Federal Reserve tightening. CME Group’s FedWatch tool showed the probability of a rate hike by December falling to roughly 16 percent from 25 percent on Friday.
“Nearer-term, gold is likely to stay sensitive to Federal Reserve policy path expectations, USD, and geopolitical developments,” said Christopher Wong, a strategist at OCBC Bank in Singapore. “But the rebound suggests dips may continue to find support unless real yields move meaningfully higher.”
Wall Street’s biggest bullion bank struck a similar note. In a client note circulated on Tuesday, JPMorgan analysts noted that spot gold is still trading about 17 percent below pre-conflict levels despite the latest bounce. The sell-off, they argued, reflected “USD strength and broad-based de-risking” rather than a fundamental shift in the metal’s long-term outlook.
“This flush has historically been a tactical dip to buy,” the bank wrote, “and the bullish case strengthens the longer the conflict persists.”
The broader precious-metals complex joined the rally. Spot silver climbed 2.6 percent to $73.08 an ounce, platinum rose 0.9 percent to $1,951.35, and palladium gained 1.5 percent to $1,460.60. Industrial metals such as platinum and palladium remain more closely tied to global manufacturing demand, but the day’s move showed that sentiment in the gold pit spilled over into the rest of the complex.
For now, the market is balancing two powerful crosscurrents: the hope of de-escalation in the Gulf that could cap energy prices and the lingering uncertainty that any peace deal could unravel as quickly as it appeared.
Until clearer signals emerge from Washington and Tehran, gold’s newfound support looks likely to be tested again — but for the moment, buyers have the upper hand.
WHAT YOU SHOULD KNOW
Gold surged 1.6% to $4,545.34/oz on Wednesday, driven primarily by a softer US dollar and falling oil prices that eased inflation fears and tempered expectations of higher interest rates. Despite conflicting US-Iran signals on ending the war, keeping markets nervous, the rebound shows dips continue to find strong support.
