Gold prices surged to their highest level in nearly three weeks on Wednesday after US President Donald Trump announced a two-week suspension of military attacks against Iran, temporarily easing geopolitical tensions that had threatened to disrupt global energy supplies and fuel inflation.
The benchmark US gold futures for June delivery climbed 3.4% to $4,841.60 per ounce, marking the sharpest single-day gain in over a month. The rally came after President Trump stated that Washington had agreed to pause bombing and attacks for 14 days, describing a 10-point proposal received from Iran via Pakistan as a “workable basis for negotiations.” This development followed earlier US warnings that Tehran must reopen the Strait of Hormuz, a critical oil shipping chokepoint, or face retaliation.
Pakistan, which has been mediating between the two nations, requested the two-week extension to allow diplomatic efforts to proceed. Iran’s Supreme Security Council confirmed that negotiations with the United States would begin on April 10 in Islamabad, though it emphasized that the talks do not signal an end to the conflict that began on February 28.
“This is a knee-jerk relief rally, and it remains to be seen if Iran complies,” said independent metals trader Tai Wong. “For gold, the 200-day moving average at $4,930 and then $5,000 will be key hurdles.” Similarly, silver prices rose 4.9% to $76.48 per ounce, with Wong noting the $80-$81 level as important for the metal.
The ceasefire announcement alleviated immediate concerns about a prolonged disruption to global oil trade, which had raised fears of energy-driven inflation. According to research by the Federal Reserve Bank of Dallas, such a disruption could push US inflation above 4% by year-end, with steeper short-term increases possible. Gold, often viewed as a safe-haven asset and inflation hedge, tends to benefit from such uncertainties but can weaken in high-interest-rate environments as it offers no yield.
Gold had started the year strongly but had fallen more than 8% since the Iran conflict erupted, as investors weighed the potential for aggressive central bank rate hikes to combat inflation. Markets are now awaiting the minutes from the Federal Reserve’s March meeting, due later Wednesday, for further clues on monetary policy. Other precious metals also gained: platinum rose 3.2% to $2,020.57, and palladium added 4.1% to $1,529.35.
The temporary ceasefire underscores the fragile nature of the US-Iran standoff, with global markets closely monitoring developments. As reported by Reuters, the situation remains fluid, and any breakdown in diplomacy could quickly reverse the gains in safe-haven assets like gold.
Source: ARY News