Gold prices fell about 2% to roughly $4,400 an ounce on Wednesday, marking their lowest level in nearly two months, as sliding oil prices helped temper fears of another inflation spike. Market attention remained firmly on developments in the Middle East, where traders grew increasingly hopeful that the United States and Iran could soon reach an agreement to end the conflict and reopen the Strait of Hormuz.
That optimism persisted despite mixed signals from both Washington and Tehran and despite fresh strikes earlier this week. Iranian state television reported details of an unofficial draft memorandum between Tehran and Washington under which the two sides would restore shipping traffic through the Strait of Hormuz, while Iran and Oman would set up a mechanism to manage passage through the waterway.
Gold is now trading nearly 15% below the levels reached at the onset of the conflict, as concerns over an energy-driven inflation shock have reinforced expectations that major central banks may maintain tighter monetary policy for an extended period.