Gold prices moved modestly higher on Wednesday, supported by a softer U.S. dollar, after President Donald Trump announced an extension of the ceasefire agreement with Iran, raising cautious expectations of a longer period of stability in the Middle East.
As of 06:07 ET (10:07 GMT), spot gold was up 0.7% at $4,750.76 per ounce, while gold futures climbed 1.1% to $4,769.41. The metal was recovering from losses in the previous session after Federal Reserve chair nominee Kevin Warsh said he had not committed to cutting interest rates if confirmed.
A decline in the U.S. dollar provided additional support for bullion, as a weaker currency typically boosts demand by making gold more affordable for international buyers. The dollar index, which tracks the greenback against six major currencies, was last down 0.1%.
The dollar had surged in March as investors sought safety, betting that strong U.S. energy exports would cushion the economy from supply shocks linked to disruptions in the Strait of Hormuz. More recently, however, it has retreated to levels seen before the conflict, with some analysts suggesting that the worst of the geopolitical tensions may already have passed.
“[T]he majority of the public comments we see, from both sides, at present, largely seem aimed at obtaining negotiating leverage, as opposed to being geared towards seeking actual re-escalation of the conflict,” said Michael Brown, Senior Research Strategist at Pepperstone.
Ceasefire extension in focus
In a social media statement on Tuesday, Trump said the ceasefire extension had been agreed at the request of Pakistan, which often acts as a mediator between Washington and Tehran.
Iran’s foreign ministry spokesperson acknowledged the extension in comments carried by state television, according to the Associated Press.
At the same time, uncertainty persists around future peace negotiations. A planned visit by U.S. Vice President JD Vance to Pakistan for another round of talks was postponed after Iranian state media reported that their delegation considered the discussions a “waste of time because the U.S. prevents reaching any suitable agreement.”
Pakistani officials, however, continue to work to keep negotiations on track, according to the Associated Press, with Islamabad awaiting confirmation on when Iran might send representatives for further discussions. Previous talks earlier this month ended without a breakthrough.
Hormuz disruptions continue
Supply disruptions in the Strait of Hormuz remained a key concern on Wednesday.
U.K. Maritime Operations reported that a container ship was attacked in the area, shortly after a vessel was struck by a boat linked to Iran’s Islamic Revolutionary Guards Corps.
Trump has also said that the U.S. naval blockade of Iranian ports and coastline—described by Iran’s foreign minister as an “act of war”—will remain in place. He argued that Iran is “collapsing financially!” and wants the strait to be “opened immediately” because Tehran is “Starving for cash.”
Tanker traffic through the Strait of Hormuz, a critical route for global oil supply, has been heavily restricted since the conflict began in late February.
Oil prices moved higher on Wednesday, with Brent crude hovering just below $100 per barrel. The rise in crude prices compared with pre-war levels has fueled concerns about a potential inflation spike that could weigh on global growth and push central banks toward tighter monetary policy.
As a non-yielding asset, gold typically faces headwinds in higher interest rate environments.