Gold prices climbed over 2% in Asian trading on Wednesday, supported by a drop in oil prices and a weaker U.S. dollar, as reports of a potential Middle East ceasefire reduced inflation concerns and boosted the metal’s appeal.
Spot gold was last up 2.3% at $4,577.55 an ounce by 23:06 ET (03:06 GMT). U.S. Gold Futures jumped 4% to $4,611.70.
Investors reacted to reports that the United States had sent Iran a 15-point plan aimed at ending the war 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 strike a peace deal.
Trump had earlier described talks with Iran as “productive” earlier this week, although Iranian officials denied that any negotiations were taking place, highlighting continued uncertainty around the diplomatic outlook.
Oil prices, which had surged in previous sessions on supply disruption fears, slipped sharply on Wednesday, with Brent crude falling below $100 a barrel.
The decline in oil prices helped support gold by easing inflation expectations, which in turn reduced pressure on central banks to keep interest rates higher for longer.
Lower energy costs can dampen bond yields and weaken the dollar, both of which tend to benefit non-yielding assets such as gold.
The US Dollar Index fell 0.2% in early trading on Wednesday.
Gold had come under heavy pressure in recent sessions as rising oil prices and bond yields fueled inflation fears and strengthened the dollar, triggering a broad selloff in precious metals.
Despite Wednesday’s rebound, analysts said volatility is likely to persist, as markets remain highly sensitive to headlines around the Middle East conflict.
In other precious metals, silver prices rose 3.3% to $73.60 per ounce, while platinum gained 2.2% to $1,977.60/oz.
