Hope emerges in US-Iran ceasefire negotiations, gold rebounds for two consecutive days, and the market bets on the future "exit strategy".

As traders weigh the outlook for U.S.-Iran ceasefire talks, gold prices rose for the second consecutive trading day.

Gold prices once rose as much as 2.8%, extending the previous trading day’s gain of 1.6%. On Wednesday, White House press secretary Karoline Leavitt reiterated that peaceful talks with Iran are still ongoing. At the same time, Iran publicly rejected the United States’ overtures and put forward new conditions for ending the conflict that has dealt a severe blow to the Middle East and global markets.

Helen Amos, a commodities analyst at Bank of Montreal Capital Markets, said that although both sides have repeatedly gone back and forth, U.S. actions have shown that the “U.S. intends to move toward some kind of resolution. The U.S. is trying to open a dialogue, and I think that’s the key.”

Speaking about the conflict, Amos said, “The market is starting to see some kind of exit path in the coming weeks.” She added that this has brought a “solid rebound” to precious metal prices, “but there is currently no definite evidence indicating that speculative capital will return to this sector.”

Since the outbreak of war more than three weeks ago, the gold trend has largely tracked the stock market, and it has had an inverse relationship with crude oil. Rising energy prices have increased inflation risks, leading investors to bet that the Federal Reserve and other central banks will keep interest rates unchanged or choose to raise them, which is a negative factor for gold, which does not generate interest.

Mark Haefele, Chief Investment Officer for Global Wealth Management at UBS, wrote in a report on Wednesday that reduced investor positions, a decline in purchasing power in the Middle East, and expectations of rate hikes have all put pressure on gold prices. “As some of these factors may reverse in the coming months, we believe the current pullback in gold prices is the time to increase positions.”

As of the time of publication, spot gold was up 0.07%, to $4,509.78 per ounce. Silver fell 0.76% to $70.71, after closing up 3% on the previous trading day. Platinum rose, palladium fell, and the Bloomberg U.S. Dollar Spot Index edged higher.

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Responsible editor: Guo Jian