Investing.com — prices rose on Wednesday, with spot gold headed for a sixth positive session in eight. The beaten down yellow metal has been regaining momentum amid signals that the U.S. and Iran could move toward ending the Middle East conflict.
At 15:50 ET (19:50 GMT), was up 2% to $4,762.14/oz. Gold Futures climbed 2.3% to $4,785.25/oz.
Spot prices on Tuesday ended March with their worst monthly performance in over 17 years, as rising inflation expectations on the back of the Iran war battered non-yielding assets such as metals.
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Trump suggest impending U.S. exit, says Iran asked for ceasefire
Trump on Wednesday said on his Truth Social service that “Iran’s New Regime President, much less Radicalized and far more intelligent than his predecessors, has just asked the United States of America for a CEASEFIRE!”
“We will consider when Hormuz Strait is open, free, and clear. Until then, we are blasting Iran into oblivion or, as they say, back to the Stone Ages!!!” the president added.
If confirmed by Iran, this would mark another significant step towards de-escalation, even with uncertainty around the Strait of Hormuz. The critical waterway through which a fifth of the world’s oil and gas supply flows has been effectively shuttered by Iran since the start of the conflict, leading to surging oil prices across the globe.
On Tuesday, Trump said Washington could exit the Iran conflict within “two to three weeks,” adding that Iran doesn’t have to make a deal to conclude the conflict.
On the Iranian side, state media reported that President Masoud Pezeshkian said Tehran was ready to end the war, while reiterating key demands including guarantees against future attacks.
Gold coming off worst month since October 2008
Gold prices in March posted their worst monthly performance in nearly two decades. The yellow metal, usually seen as a safe haven asset during geopolitical crises, was battered by growing doubts over more interest rate cuts by central banks across the globe as the Iran war boosted oil prices and ramped up expectations of higher inflation. Traders instead turned to the U.S. dollar.
While the Federal Reserve said the right move was to hold interest rates steady and look past the oil shock, some major central banks, including the European Central Bank and the Bank of Japan, signaled potential rate hikes to quell energy-fueled inflation, driving up yields and denting the appeal of non-yielding assets.
“While gold had its toughest month in over a decade, much of the selling looks technical rather than fundamental. The recent bounce has the feel of an exhaustion move after a forced liquidation, not a clean breakout. Gold dropped roughly 20-25% from the January highs near $5,600, and after nine straight sessions of selling, we are finally seeing downside pressure start to crack,” Max Baecker, president of American Hartford Gold, told Investing.com.
“The key level to watch was that $4,100–$4,300 zone, where the 200-day average and prior highs lined up. Buyers stepped in there decisively, which tells us that longer-term conviction hasn’t disappeared, but it also doesn’t guarantee a straight move higher from here,” he said.
“In the near term, gold is trading inside a defined range. The market needs to clear the mid-$4,500s and hold it to shift the tone. Until that happens, rallies can still run into resistance and turn into selling opportunities,” Baecker added.
Among other precious metals, edged up 0.2% to $75.2845/oz, while added 0.3% to $1,976.35/oz.
Ayushman Ojha and Scott Kanowsky contributed to this article