Gold prices fell slightly after hitting a one-month high in trading on Wednesday, as expectations of resuming peace talks between the US and Iran improved risk appetite, while rising oil prices increased concerns about inflation.
Spot gold prices fell 0.3% to 4,811.80 USD per ounce at 2:30 PM Vietnam time, after previously hitting a high since March 18. Meanwhile, US gold futures for June delivery stood flat at 4,850.40 USD per ounce.
US President Donald Trump said negotiations to end the Iranian conflict could resume in Pakistan within the next two days, after negotiations last weekend broke down.
According to Mr. Edward Meir - an analyst at Marex, gold prices in the short term are reacting strongly to information related to the Middle East, especially the expectation that the two sides may return to the negotiating table.
He believes that if negotiations continue to fail, the market may return to the state before the ceasefire, with gold depreciating, the USD strengthening and the stock market weakening.
Since the beginning of the week, gold prices have still increased by about 1.6%.
On the financial market, Asian stocks rose to a 6-week high, as investors expect the Iranian conflict to cool down soon.
Meanwhile, oil prices increased due to concerns that supply from the Middle East region is still disrupted, as the Hormuz Strait - a strategic energy transport route - has not been fully cleared.
Rising oil prices lead to inflationary pressure through transportation and production costs. Although gold is often considered an inflation hedging tool, a high interest rate environment reduces the attractiveness of precious metals as they do not generate profits.
The US military said it has deployed maritime blockades, completely disrupting Iran's maritime trade activities.
In the US, the market currently forecasts about 29% of the possibility that the US Federal Reserve will cut interest rates by 0.25 percentage points this year, up from 13% last week. Before the conflict broke out, the market had expected two interest rate cuts in 2026.
OCBC experts believe that although gold and silver increased sharply in the previous session, the general signal of the market currently leans towards a "risk-firing" state rather than defensive.
In other metals, silver rose 0.4% to $79.88 per ounce, platinum rose 0.4% to $2,112.05 per ounce and palladium rose 0.1% to $1,588.29 per ounce.
