Gold Prices Advance as Oil Declines on Middle East Negotiation Hopes

Gold Gains Despite Earlier Pullback

Spot gold prices were last up 2.56% at $4,588 per ounce on Wednesday. Gold futures for April delivery were last seen over 4% higher at $4,597.7 per ounce. The move came as market participants reacted to declining oil prices, which helped temper worries about persistent inflation.

Despite the latest gains, gold prices remain about 17% below their late-January peak. According to Goldman Sachs, the recent pullback in gold prices has been largely in line with historical patterns. The bank cited higher interest rate expectations and market volatility as key drivers behind the earlier decline.

Goldman Sachs has maintained a structurally bullish outlook on gold, forecasting prices to reach $5,400 per ounce by year-end. The forecast is underpinned by continued central bank buying as countries seek to diversify into assets with lower geopolitical and financial risks.

Oil Retreats After Trump Comments on Iran Talks

Oil prices fell after U.S. President Donald Trump said Tuesday that the United States and Iran are “in negotiations right now” and suggested that Tehran is eager to reach a peace deal, despite Iranian denials of direct talks with Washington. Speaking in the Oval Office, Trump said he decided to back off from a recent threat to order strikes on Iranian energy infrastructure “based on the fact we're negotiating.” He added, “They're talking to us, and they're talking sense,” when asked to explain his change in stance.

Following these comments, international benchmark Brent crude futures fell around 6% to $98.31 per barrel. U.S. West Texas Intermediate futures were also down roughly 5% at $87.65 per barrel. The dollar index was down 0.17% in early Asia hours, providing an additional backdrop for moves in commodity markets.

FAQ

Why did gold prices rise on Wednesday?
Gold prices rose as declining oil prices helped ease concerns about persistent inflation, and as markets responded to developments related to U.S. efforts to advance a proposal to end the Middle East conflict.

How much did spot gold and gold futures move?
Spot gold was last up 2.56% at $4,588 per ounce, while April gold futures were more than 4% higher at $4,597.7 per ounce.

What is Goldman Sachs’ outlook for gold?
Goldman Sachs has maintained a structurally bullish outlook, forecasting gold to reach $5,400 per ounce by year-end, supported by ongoing central bank buying and a drive to diversify into assets with lower geopolitical and financial risks.

How did oil prices react to President Trump’s comments on Iran?
After President Trump said the U.S. and Iran were “in negotiations right now” and indicated he had backed off threats to strike Iranian energy infrastructure, Brent crude futures fell about 6% to $98.31 per barrel and WTI futures declined roughly 5% to $87.65 per barrel.