Gold jumps 3% to $4,700 on hopes of US-Iran deal, Hormuz tensions easing

Gold prices climbed more than 3% on Wednesday, reaching $4,700 per ounce, as renewed diplomatic signals from Tehran and Washington raised hopes that tensions around the Strait of Hormuz could ease after weeks of conflict and military escalation. Investor sentiment improved following reports that the White House believes it is nearing a deal with Iran on a one-page memorandum of understanding aimed at ending the war and establishing a framework for broader nuclear talks.

Diplomatic developments

Washington expects a response from Tehran on several key issues within the next 48 hours, Axios reported, citing two US officials and two other sources. The diplomatic developments followed President Trump's announcement Tuesday that the US military would temporarily pause "Project Freedom," Washington's operation to secure commercial shipping through the Strait of Hormuz.

Pakistan's role

Trump said the decision was made at the request of Pakistan and several other countries. Pakistani Prime Minister Shehbaz Sharif welcomed Trump's decision, expressing hope that the current momentum would lead to a lasting agreement ensuring durable peace and stability in the region. "Pakistan remains firmly committed to supporting all efforts that promote restraint and a peaceful resolution of conflicts through dialogue and diplomacy," Sharif wrote on X.

Safe-haven demand

The Strait of Hormuz remains one of the world's most critical energy chokepoints, and weeks of military escalation have kept investors focused on risks to global shipping and oil flows. Gold, traditionally viewed as a safe-haven asset during geopolitical uncertainty, has remained highly sensitive to developments in the region.