GOLD and silver recorded their sharpest gains in about a month on Wednesday as optimism grew that the US and Iran are approaching a deal to end their war, pushing the dollar and oil prices lower.
Bloomberg News reported that bullion climbed as much as 3.7% to exceed $4,700 an ounce before settling at $4,680.20 as of early afternoon in London – its highest level in more than a week. Silver surged as much as 6.8%, trading up 5.5% at $76.81 an ounce. Platinum and palladium also advanced.
Iran is evaluating a new US proposal to end the conflict. Washington and Tehran are working on a one-page memorandum of understanding to frame more detailed nuclear negotiations, Axios reported, citing four sources. While no agreement has been reached, the US expects a response from Iran on key points within 48 hours.
President Donald Trump said on social media that “great progress” had been made, adding that he would pause a US-led effort to help vessels exit the Strait of Hormuz while a potential deal is finalised.
Gold has lost about 11% since the war began, as the closure of Hormuz and the resulting energy price shock reduced expectations of interest rate cuts — a headwind for non-yielding bullion. A weaker dollar following the peace reports made the metal cheaper for international buyers, amplifying the rally.
JSE gold shares benefited from the improvement in the metal’s price. Shortly before the close, Harmony Gold and Sibanye-Stillwater had gained over 9% each, the latter also boosted by a 3.7% and 2.7% increase in platinum and palladium prices.
Shares in Valterra, Impala Platinum, Gold Fields and DRDGold were all more than eight percent higher on the day.
“Gold and silver are rallying as hopes of a US-Iran deal push oil and the dollar lower, easing the macro headwinds that have weighed on bullion in recent weeks,” Ewa Manthey, commodities strategist at ING told Bloomberg News.
“Sustaining the move now depends on whether this de-escalation persists and keeps energy prices, and inflation expectations, contained.”
