Gold pushed higher for a third consecutive session Wednesday, buoyed by growing optimism that the United States and Iran may be nearing the end of their military confrontation, as both sides signalled a willingness to bring hostilities to a close.
Metals Markets at a Glance
The precious metal climbed 1.2%, surpassing the $4,700-per-ounce mark, building on the 3.5% gain recorded in the previous session. Silver, however, moved in the opposite direction, slipping 0.5% to $74.82 per ounce.
Diplomatic Signals From Both Sides
President Donald Trump indicated that Washington had largely achieved its military objectives and would leave other nations to handle outstanding issues surrounding the Strait of Hormuz. Iranian President Masoud Pezeshkian echoed a conciliatory tone, stating that Tehran was prepared to end the conflict provided its key demands were met.
March’s Historic Slump Still Looms Large
Despite the recent rebound, gold’s 12% decline in March remains the worst monthly performance for the metal since October 2008. Now in its fifth week, the war has rattled global markets, throttled energy supplies, and stoked fears of a simultaneous rise in inflation alongside a slowdown in economic growth.
Markets Pivot From Inflation to Growth Concerns
Traders are parsing Federal Reserve communications closely for clues on the interest rate outlook. Bond markets have notably shifted their focus away from inflation risks toward the war’s broader impact on growth, after Fed Chair Jerome Powell stated that long-term inflation expectations remain well anchored.
Yuksuan Tang, Head of Interest Rate and Currency Strategy at JPMorgan, noted that gold’s appeal as a safe haven tends to reassert itself when the narrative pivots from inflation to growth risks. She added that the bank holds a strong conviction that the Fed has limited room to raise rates in the current cycle, and that policymakers will keep their attention firmly on labour market pressures.
Analysts Eye $5,400 by Year-End
The broader outlook for gold remains constructive among major institutions. Goldman Sachs has projected that the metal could reach $5,400 per ounce by the end of the year, reflecting expectations that macroeconomic uncertainty and geopolitical tensions will continue to underpin demand for the safe-haven asset.
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