Gold prices edged higher on Wednesday, finding some support after tumbling more than 1% in the previous session. A weaker U.S. dollar helped lift the price of the metal. Still, the gains were capped by a fragile ceasefire between Israel and Iran that dampened overall demand for safe-haven assets.
Bullion plunged on Tuesday after President Donald Trump announced the truce, which initially eased fears of a wider conflict in the Middle East. With immediate geopolitical risks seemingly off the table, investors shifted their focus from gold to riskier assets.
However, uncertainty is creeping back into the market, providing a floor for prices. Doubts remain over how long the ceasefire will hold, especially after Trump himself accused both sides of violations. Furthermore, a new report suggesting U.S. strikes failed to destroy Iran’s nuclear program—only setting it back by a few months—has reintroduced a layer of geopolitical risk.
The dollar’s slide provided the most direct support for gold, making it more affordable for international buyers. This came as Federal Reserve Chair Jerome Powell signaled a cautious approach to future rate cuts, telling Congress he needed more time to assess the impact of tariffs on inflation. Other metals, including silver and copper, also rose in response to the weaker dollar.
