Gold prices advanced during Asian trading on Wednesday, supported by a pullback in oil prices and a slightly weaker U.S. dollar, though gains were restrained by ongoing tensions in the Middle East.
Spot gold was last up 1.8% at $4,553.55 an ounce by 03:19 ET (07:19 GMT). U.S. gold futures rose 3.3% to $4,582.70.
Iran strikes continue even as U.S. says negotiations took place
Market participants responded to reports that the United States had presented Iran with a 15-point proposal intended to end the 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 eager to reach a peace agreement.
However, local media reported that Israel carried out strikes on Iran’s capital, Tehran, on Wednesday.
Earlier in the week, Trump described discussions with Iran as “productive,” although Iranian officials rejected those claims and said no negotiations were underway.
Oil prices, which had surged in recent sessions on concerns about supply disruptions, moved lower on Wednesday but remained at elevated levels.
The drop in oil prices provided support to gold by easing inflation expectations, which in turn reduced pressure on central banks to maintain higher interest rates for longer.
Lower energy costs can help push down bond yields and weaken the dollar, both of which typically benefit non-yielding assets such as gold.
The U.S. Dollar Index slipped 0.1% during Asian trading on Wednesday.
Gold pressured by inflation fears
Gold had faced heavy selling pressure in recent sessions as rising oil prices and higher bond yields fueled inflation concerns and strengthened the dollar, triggering a broad retreat across precious metals.
Despite Wednesday’s rebound, analysts warned that volatility is likely to continue, as markets remain highly sensitive to developments surrounding the conflict in the Middle East.
Among other precious metals, silver climbed 3% to $73.41 per ounce, while platinum increased 2.2% to $1,977.60 an ounce.
Benchmark copper futures on the London Metal Exchange rose 1.2% to $12,264.33 per ton, while U.S. copper futures slipped 0.7% to $5.52 per pound.