Gold prices surged on Wednesday, reaching levels not seen in nearly three weeks, following a temporary halt in U.S. military action against Iran. The move, announced by President Donald Trump, prompted markets to reassess immediate geopolitical risks and relieved some fears of inflation driven by higher energy costs.
The precious metal rallied to above $4,850 an ounce, showing an increase of as much as 3.1% and its highest mark since March 19. Additionally, U.S. gold futures for the June contract also climbed, advancing 3.4% to $4,841.60.
The White House agreed to suspend attacks on Iran for two weeks after receiving a 10-point negotiation proposal from Tehran, which Trump deemed a workable framework for further discussion. This de-escalation came shortly after the U.S. had threatened retaliation if Iran did not reopen the Strait of Hormuz.
According to Iranian officials, planned talks with the U.S. will commence on April 10 in Islamabad, though they emphasized that these negotiations do not signify an end to hostilities.
Independent metals trader Tai Wong observed that the rally in gold reflected immediate relief rather than a longer-term shift, noting key resistance levels looming at $4,930 and $5,000 per ounce. Silver also saw notable movement, with traders monitoring the $80–$81 range as significant.
The conflict, now stretching into its sixth week, has pushed commodity prices higher and stoked expectations of rising inflation. Research from the Federal Reserve Bank of Dallas warned that protracted disruption to energy supplies could elevate U.S. inflation above 4% before year-end.
Despite starting the year strong, gold prices had dropped more than 8% since the outbreak of war in late February. However, the recent ceasefire and hopes for slowing global growth have allowed gold to recover some losses. Meanwhile, equities rallied, and oil prices dropped below $100 a barrel as geopolitical tensions eased.
Investors are now awaiting minutes from the Federal Reserve’s March meeting, expected later in the day, for further guidance on monetary policy. Central bank officials have recently expressed caution, with several noting concerns over persistent inflation and moderating economic growth.
