Gold prices pulled back slightly Wednesday from recent highs as market participants assessed the likelihood of U.S.-Iran ceasefire negotiations before a fragile truce expires next week.

Spot gold declined 0.6% to $4,815.17 per ounce, while gold futures fell 0.3% to $4,838.40 per ounce by 02:23 ET. The pullback followed a sharp Tuesday rally fueled by dovish inflation data and diplomatic optimism. Silver retreated 0.4% to $79.2715 per ounce, while platinum held steady at $2,107.21 per ounce.

Soft Inflation Data and Weakening Dollar Lift Precious Metals

Gold surged to its highest level in a month Tuesday after U.S. producer price inflation came in below economist expectations for March. The soft PPI reading mirrored March’s consumer price data pattern, with headline inflation pressured by energy costs while core readings remained restrained.

The disappointing inflation print weakened the U.S. dollar, supporting broader precious metals strength. The data bolstered market expectations for Federal Reserve rate cuts later this year. Former Fed Chair Janet Yellen endorsed the possibility of one rate reduction in 2026, further supporting gold’s appeal.

Lower interest rates diminish yields on government bonds, making non-yielding assets like gold more attractive to investors seeking returns.

Iran Blockade Complicates Safe-Haven Demand

Wednesday’s recovery in oil prices—triggered by the U.S. military’s full implementation of an Iranian naval blockade—created crosscurrents for gold. While gold typically benefits from geopolitical tensions, the seven-week Iran conflict has presented a paradox: inflationary war risks overshadowed traditional safe-haven demand.

President Trump signaled imminent ceasefire negotiations within two days and characterized the conflict as nearing conclusion. Both Washington and Tehran reportedly remain open to dialogue before next week’s ceasefire expiration.

The ceasefire held firm Wednesday morning with no reported military escalation, supporting cautious market sentiment and limiting gold’s traditional geopolitical risk premium.