Gold Rise during Iran War: Gold prices moved higher again on Wednesday and kept this week’s strong climb going. Spot gold rose about 1.3% to $4,728.75 an ounce, while U.S. gold futures gained about 1.7% to $4,755.70. The metal has now gone up for four straight trading sessions. Reuters said this fresh move came as the U.S. dollar weakened and markets started hoping that the Iran war may calm down soon.
This change in mood started after Donald Trump signaled that the fighting may not last much longer. He told reporters the United States could leave the war “within two weeks, maybe two weeks, maybe three”. He also later said the U.S. could get out of Iran “pretty quickly,” even if it may come back for limited action if needed. Those comments made investors look less worried about nonstop war and more focused on the wider economy and future interest-rate moves.
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Why Gold is Rising even when Tensions can Ease?
At first, the war pushed up inflation fears because oil prices jumped as the Strait of Hormuz was disrupted. That route is a major path for global oil supplies, so traders worried that expensive energy would make inflation worse and force central banks to stay tough on rates. That kind of setup can hurt gold because gold does not pay interest. Reuters reported that gold had dropped more than 11% in March as those inflation fears grew.
Now the story has changed a bit. If the war cools down, oil pressure may also ease. That can lower inflation worries and bring back hopes for interest-rate cuts later on. When that happens, gold can look more attractive again. Reuters said markets are now thinking more about growth risks and weaker economic momentum, while the falling dollar is also helping bullion. A softer dollar usually makes gold easier to buy for people using other currencies.
Trump also added to the attention around gold by saying, “I’m a gold person,” as markets watched the metal rebound. At the same time, equities also rose for a second straight day as traders reacted to hopes that the war may move closer to an end. So money started flowing into both stocks and gold, but for different reasons. Stocks liked the idea of less war risk, while gold liked the weaker dollar and the chance that rate-cut hopes may return.
Big Banks still think Gold can go higher
Some market experts now believe gold may have much more room to rise if the war really slows down. Reuters reported that Bob Haberkorn of RJO Futures said “gold could move back above $5,000 per ounce if we’re on a path toward de-escalation, as rate cut expectations could creep back in.” That shows how strongly traders are linking gold’s next move to the path of the war and to the Federal Reserve.
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Large banks are also still positive on gold. Reuters reported that Goldman Sachs kept its year-end target at $5,400 an ounce. Wells Fargo has talked about an upside target of $6,300, and BNP Paribas also sees gold moving above $6,000 this year. Even after this week’s bounce, gold is still below its January record high near $5,600, so some analysts believe there is still room left if markets stay supportive.
