Gold bars are stored in a safe deposit room in Munich, Jan. 28, 2026.
Angelika Warmuth | Reuters
Gold prices climbed on Wednesday as declining oil prices helped temper worries about persistent inflation, following reports that Washington is working on a proposal to end the Middle East conflict.
Spot gold prices were last up 2.56% at $4,588 per ounce, while gold futures for April delivery were last seen over 4% higher at $4,597.7 per ounce.
U.S. President Donald Trump said Tuesday the U.S. and Iran are “in negotiations right now” and suggested Tehran is eager to make a peace deal, even as the Islamic Republic has denied it is in direct talks with Washington.
Speaking in the Oval Office, Trump said he decided to back off from his recent threat to order strikes on Iranian energy infrastructure “based on the fact we’re negotiating.”
“They’re talking to us, and they’re talking sense,” Trump said when asked to further explain his pivot.
Oil prices fell following Trump’s comments. International benchmark Brent crude futures fell around 6% to $98.31 per barrel, while U.S. West Texas Intermediate futures were also down roughly 5% at $87.65 per barrel.
The dollar index, which measures the strength of the greenback against a basket of currencies, was down 0.17% early Asia hours.
Gold prices, however, remain about 17% below their late-January peak.
Goldman Sachs said the recent pullback in gold prices was largely in line with historical patterns, citing higher interest rate expectations and market volatility as key drivers behind the decline.
“We don’t think that the decline … is surprising in light of our existing pricing framework,” said the bank’s co-head of global commodities research Daan Struyven on Wednesday. He noted that rising rate expectations have weighed on investor demand, particularly through gold-backed ETFs, which are “very rate sensitive.”
Episodes of extreme market stress can also pressure bullion, Struyven told the media in a briefing call, as investors facing margin calls tend to sell gold alongside other assets.
He also suggested that gold’s latest rally has overshot fundamentals, with part of the correction reflecting “a bit of normalization.”
Still, Goldman has maintained a structurally bullish outlook, forecasting gold to reach $5,400 by year-end, underpinned by continued central bank buying as countries seek to diversify into assets with “lower geopolitical and financial risks.”