Gold prices surged by more than 2% on Wednesday following remarks from U.S. President Donald Trump suggesting the potential for a peace agreement with Iran, which subsequently lowered both the dollar and crude oil prices amid alleviated inflation concerns.
As of 0811 GMT, spot gold increased by 2.7% to $4,680.91 per ounce, marking its highest level since April 28. Additionally, U.S. gold futures for June delivery also rose by 2.7%, reaching $4,693.20.
On Tuesday, President Trump announced a temporary pause in operations aimed at escorting ships through the Strait of Hormuz, citing advancements toward a comprehensive agreement with Iran. In response, Iran’s foreign minister stated that the country would only accept “a fair and comprehensive agreement” during negotiations with the U.S. to end the ongoing conflict in the Middle East.
Kelvin Wong, a senior market analyst at OANDA, noted that gold gained traction as “oil prices retreated on reduction in geopolitical risk premium,” following the U.S. confirmation that a fragile ceasefire between Iran remains intact despite recent skirmishes. Wong emphasized that any signs of escalating tension could trigger profit-taking among investors and cause short-term speculators to unwind their positions in gold.
A weaker U.S. dollar renders dollar-denominated metals more affordable for foreign investors. Elevated crude oil prices can drive inflation, increasing the probability of higher interest rates. While gold is traditionally viewed as a hedge against inflation, rising interest rates often enhance the attractiveness of yield-bearing assets, which can diminish gold’s appeal.
Investors are looking ahead to the upcoming U.S. non-farm payroll data later this week, which will be crucial in determining whether the economy can maintain enough strength to keep the Federal Reserve’s monetary policy steady.
ANZ remarked in a note that “factors such as economic growth risks, worsening geopolitical relations, currency volatility, and downside risks to equity markets will continue to support gold’s role as a portfolio diversifier.”
In addition to gold, spot silver climbed 4.6% to $76.16 per ounce, platinum increased by 2.9% to $2,009.25, and palladium rose by 2.4% to $1,521.50.
Published on May 6, 2026.
