Gold prices climbed during Asian trading on Tuesday, recovering slightly after suffering heavy declines throughout March as rising inflation expectations tied to the U.S.–Israel conflict with Iran weighed on non-yielding assets such as precious metals.
Sentiment in metals markets improved after reports indicated that U.S. President Donald Trump is weighing the possibility of scaling back military operations against Iran, as the conflict appears likely to stretch beyond the four-to-six-week timeframe originally envisioned.
Gold also received some support after U.S. Federal Reserve Chair Jerome Powell said long-term inflation expectations remained stable despite potential short-term shocks.
Spot gold gained 1% to $5,556.54 per ounce at 01:17 ET (05:17 GMT), while gold futures rose 0.6% to $4,587.01 per ounce.
Other precious metals also moved higher on Tuesday. Spot silver surged 2.7% to $71.9805 per ounce, while spot platinum advanced 0.8% to $1,914.85 per ounce, although both metals remain on track for significant losses during March.
Trump weighing end to Iran war without reopening Hormuz – WSJ
According to a report from the Wall Street Journal on Monday evening, Trump told advisers he may be prepared to end the military campaign against Iran even if the Strait of Hormuz remains closed.
Officials reportedly believe that a mission to fully reopen the strategic waterway would likely push the conflict beyond the president’s initial timetable and could require a complex and extended military operation.
Instead, Trump is said to believe the United States could reduce hostilities after accomplishing key objectives, including weakening Iran’s naval forces and its missile capabilities.
Washington would then seek to pressure Tehran through diplomatic channels to reopen the strait and may also encourage European and Gulf allies to take the lead in restoring access.
The report raised hopes that the conflict could eventually ease, although a prolonged closure of the Strait of Hormuz — which carries about 20% of global oil supply — would likely continue to fuel concerns around energy prices and inflation.
Gold on track for worst month in nearly two decades
Despite Tuesday’s rebound, gold remains on course for its weakest monthly performance in almost 20 years.
Spot prices were down nearly 14% in March, which would also bring an end to a seven-month streak of gains for the precious metal.
Gold has been under pressure as investors increasingly question the likelihood of additional interest rate cuts from the Federal Reserve. The surge in oil prices following the outbreak of the Iran war has intensified inflation concerns, reducing expectations for monetary easing.
At the same time, several major central banks — including the European Central Bank and the Bank of Japan — have hinted that interest rate increases may be necessary to counter inflation driven by higher energy costs. Rising bond yields have in turn reduced the attractiveness of non-yielding assets such as gold.
The same pressures have weighed on other precious metals. Spot silver has fallen roughly 23% this month, while platinum is set to decline about 19% in March.