Gold prices hovered close to a one-month low on Wednesday, as demand for the precious metal remained subdued amid ongoing uncertainty surrounding the conflict with Iran. Investor caution ahead of the latest Federal Reserve policy decision also added pressure.
The metal has recorded notable losses this week, with safe-haven flows favoring the U.S. dollar instead. At the same time, rising oil prices—driven by expectations of a prolonged standoff between the U.S. and Iran—have unsettled markets.
Spot gold slipped 0.1% to $4,593.04 per ounce as of 02:09 ET (06:09 GMT), while gold futures also declined 0.1% to $4,606.31 per ounce.
Other precious metals showed mixed performance but remained under pressure following recent declines. Spot silver rose 0.7% to $73.6135 per ounce, while platinum fell 0.3% to $1,937.75 per ounce.
Trump Prepares for Extended Iran Blockade – WSJ
Donald Trump has reportedly instructed aides to prepare for a prolonged naval blockade of Iran, according to a report by The Wall Street Journal.
The strategy is aimed at increasing economic pressure on Tehran by restricting its ability to export oil, in an effort to push it toward a negotiated agreement.
Earlier reports suggested Trump was dissatisfied with a proposal from Iran that included reopening the Strait of Hormuz while delaying discussions over its nuclear program.
A prolonged blockade could heighten tensions further, potentially prompting Iran to keep the Strait of Hormuz closed in the near term. Such a development could disrupt oil supply flows across the Middle East.
Concerns over oil-driven inflation have weighed heavily on gold since late February. Markets worry that persistently high inflation could lead central banks to maintain or adopt more hawkish monetary policies, increasing the opportunity cost of holding non-yielding assets like gold and reducing its appeal as a safe haven.
“For gold to regain stronger traction, markets may need to see either a pullback in oil prices or signs that geopolitical tensions are easing enough to revive dovish Fed pricing,” analysts at OCBC Bank said in a note.
Fed Meeting in Focus for Policy Signals
Attention is also centered on the conclusion of the Fed’s two-day meeting later on Wednesday, with policymakers widely expected to keep interest rates unchanged.
The decision comes as expectations grow that the Fed may hold rates steady throughout 2026, particularly given inflationary pressures linked to the Iran conflict.
Beyond the Fed, investors are also watching upcoming rate decisions from the European Central Bank and the Bank of England later this week, which could provide further direction for global markets.