Gold’s movement on Wednesday was not driven by mild economic data, but rather by subtle geopolitical signals emerging between Washington and Tehran.

US President Donald Trump publicly stated that negotiations between the United States and Iran had entered the final stage.

At one moment, Trump warned that failure to reach an agreement could result in “very severe strikes,” while simultaneously admitting he was only “one hour away” from ordering the restart of “Operation Epic Fury.”

Markets quickly interpreted this combination of maximum pressure and willingness to negotiate as a clear sign that tensions may finally be easing.

Although Iran continued using tough rhetoric — accusing the US of preparing new attacks — Tehran also signaled willingness to cooperate with countries such as Oman to ensure shipping security through the Strait of Hormuz.

One particularly noteworthy development was that two large Chinese oil tankers carrying approximately 4 million barrels of crude oil successfully passed through the Strait of Hormuz on Wednesday, after Iran previously agreed to relax restrictions on Chinese vessels.

Although shipping traffic through the strait remains well below pre-war levels of roughly 140 vessels per day, the number of transiting ships has already doubled compared with the previous week.

These incremental but concrete developments led capital markets to sense the possibility that the worst of the conflict may be fading.

Expectations for geopolitical de-escalation first exploded through the oil market.

A single-day decline of this magnitude in crude oil prices has been extremely rare since the conflict began.

And ironically, the collapse in oil prices became exactly the signal gold bulls had been waiting for.

Just one day earlier, benchmark 10-year US Treasury yields had climbed to their highest levels since January 2025, while 30-year yields reached their highest point since before the 2007 global financial crisis.

The surge in yields had been driven largely by deep market fears that the Iran conflict could trigger long-lasting inflation pressures.

However, once oil prices sharply reversed lower on growing peace expectations, part of the inflation anxiety hanging over bond markets immediately began to fade.

On the same Wednesday, the Federal Reserve also released the minutes from its April policy meeting.

The document revealed a highly contradictory policy picture.

On one hand, most policymakers clearly warned that the Iran conflict could further intensify inflation pressures, and that monetary policy might need to tighten further if inflation remains persistently above the Fed’s 2% target.

This hawkish tone had already been repeatedly priced into markets over recent weeks and became a key force driving Treasury yields higher and gold prices lower.

On the other hand, markets also recognized that Fed officials were primarily warning and preparing — rather than signaling immediate action.

Current market pricing still implies an 89.6% probability that the Federal Reserve will leave interest rates unchanged at its next meeting in June.

This means the short-term real interest-rate environment is unlikely to materially change simply because of the hawkish wording contained in the meeting minutes.

Market Analysis:

Gold staged a strong rebound on the 4-hour chart timeframe, while both the MACD lines and histogram expanded near the zero axis.

For gold investors, the key at this moment is not blindly chasing rallies or panic-selling declines, but closely watching oil tankers in the Persian Gulf, statements from Tehran, and signals coming out of Washington.

Because in a market simultaneously priced by missiles and negotiations, gold’s next move could either become another explosive breakout to new highs — or another sharp collapse back into weakness.