Key Takeaways

• Mixed gold action: Spot gold edged down 0.2% to $4,705.50 per ounce, while U.S. gold futures rose 0.6% to $4,713.00.
• Tuesday’s pullback: Bullion fell 0.4% on a firmer dollar and elevated inflation readings.
• Negotiations on “life support”: Trump’s warning followed Tehran’s rejection of the U.S.-backed peace proposal.
• Hormuz disruption continues: The strategic strait remains effectively shut, fueling energy-driven inflation fears.
• Trump-Xi summit imminent: The May 14-15 Beijing meeting will cover trade tensions, Iran, Taiwan, and global supply chains.
• CPI shock: U.S. consumer prices rose 0.6% in April with annual CPI accelerating to 3.8% — the highest since mid-2023.
• Core inflation hotter than expected: Underlying price pressures came in above forecasts.
• Treasury yields jump: Hotter inflation lifted yields and the dollar, weighing on non-yielding bullion.
• Dollar firms: The DXY edged up 0.1% on Wednesday after rising 0.4% the previous session.
• PPI on deck: Producer price data due later Wednesday will offer more inflation clues.
• Rate cut bets pared: Traders have scaled back expectations for Fed cuts this year.
• Silver firms: Spot silver edged 0.2% higher to $86.78 per ounce.
• Platinum falls: Platinum dropped 0.8% to $2,113.80 per ounce.

Gold prices held steady during Asian trading on Wednesday, remaining largely rangebound this week, as investors turned cautious amid fading hopes for a U.S.-Iran peace deal and awaited a pivotal meeting between Donald Trump and Chinese President Xi Jinping.

Spot gold edged down 0.2% to $4,705.50 per ounce by 21:39 ET (01:39 GMT), while U.S. gold futures rose 0.6% to $4,713.00 per ounce.

Bullion fell 0.4% in the previous session on the back of a firmer dollar and elevated U.S. inflation readings.

Iran Negotiations on Life Support

Market sentiment remained fragile after Trump said earlier this week that negotiations with Iran were on “life support” following Tehran’s rejection of a U.S.-backed proposal aimed at ending the conflict and reopening the Strait of Hormuz.

The comments dampened optimism over a near-term ceasefire and kept geopolitical uncertainty firmly elevated.

The prolonged conflict has disrupted shipping through the Strait of Hormuz — a key global oil transit route — fueling fears of sustained energy-driven inflation and complicating the outlook for interest rates.

Investors were also focused on Trump’s May 14-15 summit with Xi in Beijing, where the two leaders are expected to discuss trade tensions, the Iran conflict, Taiwan, and global supply chains.

CPI Shock Adds to Headwinds

Bullion has struggled to gain momentum this week as hotter-than-expected U.S. inflation data boosted Treasury yields and strengthened the dollar — making non-yielding gold less attractive.

The U.S. Dollar Index edged up 0.1% on Wednesday after rising 0.4% in the previous session.

Data released on Tuesday showed U.S. consumer prices rose 0.6% in April, while annual CPI accelerated to 3.8% — the highest since mid-2023 — largely driven by surging energy prices linked to the Middle East conflict. Core inflation also came in above expectations.

Markets are now awaiting U.S. producer price index data due later on Wednesday for further clues on pipeline inflation pressures and the Federal Reserve’s policy path. Traders have scaled back their expectations for rate cuts this year.

Higher borrowing costs typically weigh on bullion by increasing the opportunity cost of holding the metal.

Other precious metals were mixed: spot silver edged 0.2% higher to $86.78 per ounce, while platinum fell 0.8% to $2,113.80 per ounce.