Gold jumps early Wednesday as the dollar and oil prices fell on Iran war optimism driven by indications that the conflict in the Middle East may begin to ease.
The U.S. has reportedly sent Iran a 15-point plan to end the nearly month-long war, the New York Times reported, citing two Trump administration officials it didn’t identify. The move increased market bets that the U.S. is serious about concluding the war.
The war has driven up oil prices because of the closure of the Strait of Hormuz, raising concerns about inflation and the possibility that the Federal Reserve will raise instead of lower interest rates this year. Higher interest rates are typically bearish for gold, making it a less attractive alternate investment. Conversely, speculation that the war is drawing to a close, slowing inflation and potentially putting a rate cut back into play, is bullish for the yellow metal.
June gold futures slipped 0.1% Tuesday to settle at $4,434.10 an ounce on Comex, and the most-active contract fell 3.8% in the first two days of the week. Bullion has plummeted 16% this month after climbing 11% in February and rising 9.3% in January. It rallied 64% last year. The June contract is currently up 161.8 (+3.65%) an ounce to $4595.90 and the DG spot price is $4558.10.
Prices fell Tuesday on reports that Turkey’s central bank is considering defending its currency from volatility stemming from the Iran war, potentially by tapping its gold reserves for to swap for foreign currency.
Inflation continues to be a concern for policymakers, Fed officials Michael Barr and Austan Goolsbee signaled. Barr said Tuesday that rates may need to hold steady for “some time” to address inflation, while Goolsbee said Monday that he could envision the central bank needing to raise interest rates, though multiple rate cuts are still possible this year if inflation “behaves.”
In a switch since the war began, most investors tracked by the CME FedWatch Tool expect the Fed to keep interest rates unchanged this year, and some are now betting on a rate hike instead of the rate cut they were previously anticipating. Almost 96% of investors tracked by the tool are betting on rates staying unchanged at the next policy meeting in April, and the rest are now betting on an increase.
Fed policymakers last week kept interest rates unchanged again at 3.50% to 3.75%. The Fed has kept interest rates unchanged this year after three previous rate cuts. The central bank began raising interest rates in March 2022 to fight inflation, ultimately imposing increases of by 5.25 percentage points before beginning rate cuts in 2024.
The next key economic indicator, consumer sentiment data for March, comes out Friday.
Front-month silver futures rose 0.3% Tuesday to settle at $69.57 an ounce on Comex, but the May contract is down 0.1% so far this week. The most-active contract touched a record above $115 in January. Silver is down 25% this month after gaining 19% in February and advancing 11% in January. It rose 141% last year. The May contract is currently up $3.431 (+4.93%) an ounce to $73.00 and the DG spot price is $72.93.
Spot palladium decreased 1.2% Tuesday to $1,426.00 an ounce and is down 1.5% this week. Palladium is down 21% this month after gaining 8.8% in February and advancing 2.4% in January. Palladium rose 74% last year. The DG spot price is currently up $15.80 an ounce to $1454.00.
Spot platinum fell 2.8% Tuesday to $1,881.00 an ounce and is down 5% this week. It’s down 20% this month after advancing 15% in February and gaining 1.4% in January. Platinum increased 122% in 2025. The current DG spot price is up $55.10 an ounce to $1970.70.
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