Gold prices climbed on Wednesday after two straight sessions of losses, as investors responded to U.S. President Donald Trump’s decision to extend the ceasefire with Iran indefinitely. The move pushed bullion back toward the $4,770-an-ounce level, supported by a weaker U.S. dollar and lingering uncertainty over the future of U.S.-Iran diplomacy.
Spot gold rose 0.9% to $4,763.66 an ounce, while gold futures gained 1.3% to $4,782.21. Earlier in the session, prices touched $4,772.41 after opening near $4,719.37. Silver also advanced 2.4% to $78.53 an ounce, while platinum and palladium moved higher. The rebound followed a sharp decline on Tuesday, when gold lost about 2.2% and fell to a one-week low of $4,668.74 an ounce.
Trump said the ceasefire with Iran would be extended indefinitely to allow more time for negotiations. According to reports, Pakistan, which has been acting as a mediator, requested the extension. Trump said the truce would remain in place “until Iran presents its proposal and discussions conclude one way or another.” The announcement gave markets a brief sense of relief that immediate military escalation might be avoided. However, Iran has not formally committed to the extension. Iranian state television said Tehran would not accept the truce on Trump’s terms. In contrast, an adviser to the speaker of the Iranian parliament described the move as an attempt to buy time for a surprise strike.
Despite the ceasefire extension, planned peace talks between the United States and Iran failed to materialize on Tuesday. Iran reportedly declined to attend the negotiations in Islamabad, leading U.S. Vice President JD Vance to cancel a planned trip to Pakistan.
The collapse of the talks reinforced doubts about whether a lasting diplomatic solution is close. Investors remain cautious, especially as previous rounds of negotiations have also broken down at the last minute. The broader geopolitical situation remains tense even with the ceasefire in place. The Strait of Hormuz is still closed to shipping, and Iran has said it will not reopen the route while the U.S. naval blockade continues. Reports of attacks on commercial shipping added to market concerns. A Liberia-flagged container vessel was reportedly fired upon by a gunboat linked to Iran’s Revolutionary Guard, while two other cargo ships were also targeted in separate incidents. These developments highlighted that risks to global trade and energy markets remain elevated.
Gold’s rebound came despite renewed pressure from expectations of U.S. monetary policy. Kevin Warsh, Trump’s nominee for a senior Federal Reserve position, told the Senate Banking Committee that he had made no promises to cut interest rates.
Warsh emphasized the Fed’s independence and suggested that a new policy framework may be needed to address persistent inflation. His comments were viewed as hawkish, meaning he is seen as more likely to support higher rates for longer. That matters for gold because higher interest rates tend to reduce the appeal of non-yielding assets such as bullion. According to CME FedWatch data, markets currently see a 99% probability that the Fed will leave interest rates unchanged at its April meeting, with only a 1% chance of a 25-basis-point hike.
One factor helping gold recover was a softer U.S. dollar. The dollar index slipped by roughly 0.2% to 0.3% on Wednesday from a recent high of 98.57. A weaker dollar makes gold less expensive for holders of other currencies, which can boost demand. The pullback in the dollar also reflected fading safe-haven buying after markets welcomed Trump’s extension of the ceasefire.
Even after Wednesday’s gains, gold has fallen about 10% since the Iran conflict began in late February. In recent weeks, prices have mostly traded in a band between $4,700 and $4,900 an ounce. Analysts say the market has largely absorbed the current level of geopolitical risk. A major breakout in either direction may require either a clear escalation in the Middle East conflict or a meaningful change in expectations for U.S. interest rates and the broader economy.
Edward Meir of Marex said the ceasefire extension has helped lower the perceived intensity of the crisis. But he added that if hostilities resume, the likely result would be a stronger dollar, higher oil prices, and rising interest rates, which could ultimately weigh on gold. Warsh’s nomination has also added uncertainty to financial markets more broadly. Some Republican lawmakers are reportedly reluctant to move forward with his confirmation while the Trump administration continues an investigation into current Fed Chair Jerome Powell. If that process is delayed, Powell is expected to remain in office beyond the end of his term on May 15. That uncertainty over the Fed leadership transition is another factor investors are watching closely.
Gold remains near historically elevated levels, but its recent performance shows a market caught between competing forces. Ongoing geopolitical tension in the Middle East is supporting safe-haven demand, while hawkish signals from the Federal Reserve are limiting upside.
For now, Trump’s indefinite extension of the ceasefire has helped gold recover from recent lows. But unless peace negotiations produce a credible breakthrough or the Fed outlook shifts meaningfully, prices may continue to move within their current range rather than launching into a sustained rally.