MARKET NEWS

(Bloomberg) -- Gold regained some ground after a two-day decline, as US President Donald Trump extended a ceasefire with Iran and allowed more time to arrange fresh peace talks.

Bullion rose as much as 1.1% to above $4,770 an ounce, after falling more than 2% in the previous session. Trump said he would hold off on further strikes until Iran submits a new proposal “and discussions are concluded, one way or the other.” But the Strait of Hormuz remained closed to shipping, with Iran saying it won’t reopen the vital waterway while the US maintains its own blockade of vessels coming to and from the Islamic Republic.

Oil edged higher on Wednesday, with Brent close to $100 a barrel, while a gauge of the dollar reversed a gain in the previous session to slip 0.2%, boosting gold that’s priced in the same currency.

Now in its eighth week, the war in the Middle East has triggered an unprecedented energy-supply shock that has heightened inflationary risks, making central banks more likely to hold interest rates steady or even raise them — a headwind for non-yielding bullion. Gold nosedived after the conflict began but has recovered somewhat in recent weeks.

“Gold ETF inflows have shown a consistent recovery over the last three weeks, allowing prices to continue their steady ascent since the March sell-off,” analysts at BMO Capital Markets wrote in a note Wednesday. Still, upward price momentum has slowed over the last week with signs that Asia may be selling once prices hit around the $4,850 mark, they said.

Elsewhere, Kevin Warsh pledged to act independently if confirmed as the next Federal Reserve chair in testimony before the Senate Banking Committee on Tuesday. Trump’s pick to lead the US central bank said a new framework was needed to deal with persistent inflation, without being more specific.

Investors expect Warsh – known for his hawkish stance on inflation – to pursue a measured approach to lowering borrowing costs rather than the more aggressive rate cuts urged by Trump. Expectations of a less independent Fed helped fuel gold’s price gains through 2025, as investors sought havens from inflation and currency depreciation.

Spot gold rose 0.8% to $4,757.19 an ounce at 11:54 a.m. in London. Silver climbed 1.7% to $78.02 an ounce, while platinum and palladium also advanced.