Gold Climbs as Dollar Weakens, Mideast Hopes Grow

Gold extended its rally for a fourth consecutive session on Wednesday, supported by a weaker U.S. dollar and improving sentiment in risk markets amid cautious optimism over a potential de-escalation in the Middle East conflict.

Spot gold rose 2.5% to $4,784.22 per ounce by 17:30 GMT, its highest level since March 19, while U.S. gold futures closed 2.9% higher at $4,813.10.

The dollar declined for a second straight day, making gold more attractive for investors using other currencies.

Analysts suggest prices could climb above $5,000 per ounce if tensions ease and expectations for U.S. interest rate cuts strengthen. Market attention remains focused on developments involving Iran and the Strait of Hormuz, with mixed signals around a possible ceasefire.

Experts note that while an end to the conflict could reduce demand for gold as a safe haven, it may also lower oil prices and inflation, potentially increasing the likelihood of Federal Reserve rate cuts—supporting gold prices.

Gold had dropped more than 11% in March as rising energy costs fueled inflation concerns and reduced expectations for rate cuts. Typically, gold benefits during geopolitical uncertainty and inflation, but higher interest rates tend to weigh on its appeal.

In other metals, silver gained 1.2% to $76.03, platinum rose 1.6% to $1,979.30, and palladium increased 1.3% to $1,495.95.