Gold traded above $4,800 an ounce on Wednesday, extending gains of about 2% from the previous session. Prices were supported by optimism that the US and Iran may reach an agreement to end the ongoing conflict, easing concerns about an energy-driven inflation shock. Washington and Tehran are reportedly working to arrange a second round of peace talks in the coming days, following the collapse of negotiations last weekend.
The US is maintaining a naval blockade on Iranian oil exports in the Strait of Hormuz, while Iran is considering a temporary suspension of shipments through the route as a possible confidence-building step toward a deal. At the same time, crude oil prices fell back below $90 per barrel and the US dollar index slipped to a six-week low, both developments providing additional support to gold.
Markets have also scaled back expectations for more aggressive monetary tightening, as the Federal Reserve adopts a wait-and-see approach while it assesses inflation risks.
