Gold recovered above $4,530 per ounce on Wednesday after briefly falling to a two-month low near $4,490 in the previous session. The rebound came as signs of easing tensions in the Middle East helped calm fears of a prolonged energy-driven inflation shock.

Market sentiment improved after President Trump said the United States was close to reaching an agreement to end the conflict with Iran. At the same time, reports that three supertankers had left the Persian Gulf for Asia suggested that the Strait of Hormuz blockade could be nearing an end. This pushed oil prices lower, with WTI crude falling below $100 per barrel, reducing inflation pressure on the broader market.

For gold, this matters because higher energy prices had recently strengthened inflation concerns and increased expectations that the Federal Reserve may need to keep policy tighter for longer. As oil prices eased, investors began reassessing the risk of further rate hikes.

However, uncertainty remains. Recent Fed minutes showed that policymakers are still divided, with some members open to raising interest rates again if inflation stays above the 2% target. Markets are now split between the possibility of a rate hike by December and rates staying unchanged through year-end.

Despite short-term pressure from interest rate expectations, gold still has strong structural support. The World Gold Council reported record global demand of 1,230.9 tonnes in Q1 2026, while central banks are expected to continue strong purchases this year.

Looking ahead, gold’s direction will likely depend on how the Middle East situation develops. A lasting reopening of the Strait of Hormuz could reduce inflation fears and support gold prices. But if talks fail, gold may retest the $4,466–$4,423 support zone.

For now, gold has stabilized, but the market remains highly sensitive to geopolitical headlines and Federal Reserve expectations.

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Source: Kitco