Spot Gold held in proximity to a 2-week peak on Wednesday, as the US Dollar pulled back from recent highs, amid signs of de-escalation in the Middle East conflict, which could push Oil prices down and alleviate concerns over central bank interest rate hikes.
US President Donald Trump told aides that he was willing to put an end to the military campaign against Iran even in case the Strait of Hormuz remained largely closed.
Trump is to provide an update on Iran in an address at 9 PM EDT on Wednesday.
At the same time, media reports indicated Iran’s President Masoud Pezeshkian might consider an end to the conflict under certain conditions.
Gold retreated more than 13% in March in its steepest monthly drop since October 2008, as rising energy prices fueled inflation concerns and reinforced the case for tighter monetary policy.
Traders are no longer expecting two rate cuts by the Federal Reserve this year. Instead, expectations of a potential rate hike have risen, which may keep the US Dollar underpinned and restrict Gold upside.
Higher interest rates tend to increase the opportunity cost of holding Gold, which pays no interest.
Spot Gold was last up 1.29% on the day to trade at $4,728.08 per troy ounce.
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