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Gold prices rose on Wednesday amid a US-Iran ceasefire and a weaker US Dollar, which hit a four-week low in the DXY index. The XAU/USD pair climbed over 0.70% to $4,735, retreating slightly from a three-week high of $4,857 earlier in the day. Falling oil prices also contributed to the Dollar's decline, indirectly supporting gold as investors sought safe-haven assets. The ceasefire reduced geopolitical tensions, which typically drive demand for gold as a hedge against uncertainty.
The weaker Dollar makes gold more affordable for holders of other currencies, boosting its appeal. Meanwhile, lower oil prices pressured the Dollar, as energy-linked currencies like the Canadian and Norwegian krone weakened. Traders are monitoring whether the ceasefire holds and how oil markets react to potential supply disruptions. Central bank policies and inflation data could also influence gold's trajectory.
For markets, the interplay between geopolitical risks, Dollar strength, and commodity prices remains critical. Investors should watch for updates on US-Iran relations, OPEC+ production decisions, and Federal Reserve signals. A sustained weaker Dollar could further support gold, while renewed tensions or a stronger Dollar might cap gains.
