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(Bloomberg) -- Gold advanced after President Donald Trump signaled the war in the Middle East could be nearing an end, sending oil prices lower.

Bullion rose as much as 0.9% to top $5,180 an ounce, wiping out a decline in the previous session. Trump said the conflict would be resolved “very soon” and a gauge of the dollar fell as much as 0.1%, extending a decline on Monday. Crude tumbled more than 10% in a market that’s been whiplashed by exceptionally volatile trading.

Any sign that the White House is prepared to end the war with Iran — now in its second week — could lift some of the pressure that has weighed on gold. The effective closure of the Strait of Hormuz, as well as Iranian missile strikes on energy infrastructure, has led oil prices to surge and raised concerns about inflation.

In turn, this has reduced the likelihood of interest-rate cuts by the Federal Reserve and other central banks. Higher borrowing costs are usually a headwind for gold, which doesn’t pay interest. Adding to the pressure, the haven asset has also been used as a source of liquidity during a rout in global equities as the war has progressed.

“We have seen gold playing the role it typically does within high-risk events,” Suki Cooper, global head of commodities research at Standard Chartered Plc, said in an interview with Bloomberg TV. “Initially, a geopolitical-risk premium can drive gold prices higher but, when there is pressure for cash, gold tends to be one of the first candidates that investors consider — especially when it’s been performing well.”

While trading has been choppy and upward momentum has stalled, gold has still gained around a fifth this year. Trump’s upheaval of global trade and geopolitics, as well as threats to the Fed’s independence, has broadly supported safer assets.

Since war broke out, however, the volume of gold held by exchange-traded funds has declined. Total holdings fell by nearly 30 tons last week, marking the biggest weekly selloff in more than two years, according to data compiled by Bloomberg.

These holdings have been challenged as markets have priced out rate cuts, Daniel Ghali, senior commodity strategist at TD Securities, said in a note. There are some signs that traders have “bought the dip” in the over-the-counter physical market, he said, but “volume has been limited and remains typical in scale.”