Gold prices remained firmly supported above the $4,800 level on Wednesday, hovering near a three-week high as a broadly weaker U.S. dollar and easing inflation concerns combined to lift the precious metal for a second straight session.
Spot gold traded around the upper end of its recent range after rebounding strongly from the $4,600 area, while U.S. gold futures also posted solid gains. Earlier in the day, bullion surged more than 3% to its highest level since March 19 before paring some of those advances. The move higher in gold comes amid a notable shift in market sentiment following news of a two-week ceasefire between the United States and Iran. The truce, reportedly brokered by Pakistan, has raised hopes of a pause in a conflict that had disrupted energy markets and intensified inflation worries across the globe.
According to reports, U.S. President Donald Trump said planned military strikes against Iran would be suspended for two weeks if Tehran agreed to an immediate and secure reopening of the Strait of Hormuz. Iran, in turn, signaled acceptance of a temporary ceasefire, with negotiations set to begin in Islamabad. Iranian Foreign Minister Seyed Abbas Araghchi also indicated that safe passage through the vital shipping route would be allowed during the two weeks.
That development triggered a sharp decline in oil prices, with crude falling below $100 a barrel. Lower energy prices have helped calm fears of renewed inflation pressure. This key factor has recently weighed on gold by pushing investors to reduce expectations for Federal Reserve rate cuts. As those inflation concerns ease, the outlook for U.S. interest rates has softened, Treasury yields have moved lower, and the dollar has come under broad selling pressure.
The U.S. Dollar Index fell to nearly a one-month low, making dollar-denominated gold cheaper for holders of other currencies and increasing the metal’s appeal. The weaker greenback has been one of the most important drivers behind gold’s rebound. Analysts said the truce has improved confidence across financial markets, but they also warned that the situation remains fragile. Edward Meir of Marex noted that while the ceasefire may reduce inflationary pressure and potentially reopen the door to future Fed rate cuts, both supportive for gold, the recovery could prove short-lived if negotiations break down.
Gold has been under pressure in recent weeks, falling roughly 9% to 10% since the start of the U.S.-Israeli war against Iran on February 28. Surging energy prices had fueled inflation concerns and diminished hopes for easier monetary policy, a negative backdrop for non-yielding assets such as gold. While the metal is traditionally viewed as an inflation hedge, higher interest rates tend to reduce its attractiveness.
Investors are also closely watching upcoming U.S. inflation data, including the Personal Consumption Expenditures Price Index and the Consumer Price Index, for further clues on the Federal Reserve’s policy path. Minutes from the Fed’s March meeting showed that a growing number of policymakers were open to additional rate hikes if inflation remained persistent, particularly given the potential economic fallout from the Middle East conflict.
From a technical standpoint, gold’s near-term bias has turned mildly bullish as prices recover above the midpoint of the recent consolidation range. Momentum indicators are improving: the MACD has crossed into positive territory and continues to strengthen, while the RSI is holding in the mid-60s, suggesting upward momentum without yet signaling overbought conditions.
However, the broader technical picture remains somewhat cautious. Gold is still trading below the descending 200-period simple moving average on the 4-hour chart, which aligns with the 61.8% Fibonacci retracement of the March decline near the $4,920 zone. That area represents a key resistance barrier.
A sustained break above $4,920 would strengthen the bullish case and could open the way toward the psychologically important $5,000 level, followed by $5,141, which marks the 78.6% retracement of the previous decline.
On the downside, initial support is seen near $4,760, around the 50% Fibonacci retracement level. If that floor gives way, gold could retreat toward $4,605, followed by stronger support near $4,411. A break below those levels would weaken the current recovery narrative.
The rally was not limited to gold. Other precious metals also moved sharply higher as the dollar weakened and risk sentiment improved. Spot silver jumped strongly, platinum advanced nearly 5%, and palladium posted the largest gains, rising more than 7% to 9% during the session.
Gold’s ability to hold above $4,800 reflects a market supported by a weaker dollar, lower oil prices, and hopes that reduced geopolitical tensions could ease inflation and limit the need for further Fed tightening. Even so, traders remain cautious, as the ceasefire is still tentative and the next moves in inflation data and Federal Reserve expectations will likely determine whether gold can extend gains toward the $5,000 mark or slip back into consolidation.