Gold prices rose during Wednesday’s Asian trading session, supported by a decline in oil prices and a mild weakening of the U.S. dollar. However, the upside remained somewhat limited as tensions in the Middle East showed no clear signs of easing.

Spot gold climbed 2.5% to USD 4,600/oz at 03:45 ET, marking a notable rebound after the sharp sell-off seen in previous sessions.

Geopolitical tensions may be easing in expectation, but risks remain

Markets reacted positively to reports that the United States had sent Iran a 15-point proposal aimed at ending the conflict in the Middle East. U.S. President Donald Trump said that Washington was “negotiating right now” with Iran, while also stating that Tehran was “speaking reasonably” and showing signs of being willing to move toward a peace agreement.

However, actual developments have yet to fully support a de-escalation scenario, as local media reported that Israel continued launching strikes on Tehran on the same day. Earlier, although the U.S. described the exchanges as “constructive,” Iran denied that any formal negotiations were taking place.

This suggests that geopolitical uncertainty remains elevated and could continue to drive strong market volatility in the short term.

Gold remains under pressure from inflation concerns

Despite the rebound, gold is still facing significant pressure from the broader macroeconomic environment. In previous sessions, sharp increases in oil prices and bond yields reignited inflation concerns while also strengthening the U.S. dollar, triggering a broad-based sell-off across precious metals.

Analysts believe that gold is likely to remain volatile, as the market is currently highly sensitive to developments related to the Middle East conflict as well as expectations surrounding monetary policy.

Technical analysis: Signs of recovery are becoming clearer

From a technical perspective, gold has staged a strong rebound, rising by more than USD 500 to the USD 4,600/oz area. This is a notable reaction following the previous sharp decline and is also in line with the outlook presented in the earlier analysis.

From a wave-structure perspective, gold is still moving within the decline from Gold B to Gold C, following an internal five-wave sequence: l1 – t1 – l2 – t2 – l3 (white), which is characteristic of Million-Dollar Model No. 2. At present, price is in the recovery phase from l2 (white) to t2 (white).

Once wave t2 is completed and confirmed, the primary scenario remains that wave l3 will resume, continuing to drive price toward lower levels.

Under the alternative scenario, if the recovery momentum is sustained and price breaks above the USD 4,736/oz area, the market will need to be reassessed, as this would make it clearer that the current bearish structure may have been invalidated.

Conclusion

The current upward move is mainly viewed as a technical rebound following a sharp decline, as underlying factors such as high interest rates and inflation concerns have not changed significantly.

In the short term, the USD 4,736/oz area will serve as an important confirmation level. If price fails to break above it, the scenario of a further decline in line with wave C structure remains the preferred outlook. Conversely, a successful breakout above this zone could open the door to a broader corrective phase or even a potential trend reversal.

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