Gold holds gain as Trump’s war comments ease inflation jitters

Gold prices rose as US President Donald Trump suggested the conflict in the Middle East might not extend beyond short periods, alleviating fears of prolonged inflation caused by rising energy costs. The precious metal was trading near $4,385 per ounce after rebounding 1% the prior day to end a three-day slump. Oil's surge eased following Trump's remarks, which indicated the latest strikes on Iran were likely temporary.

The renewed fighting had reignited concerns about an indefinite war, which could act as a drag on non-interest-bearing assets like gold.

Meanwhile, the US dollar dropped on Wednesday, following a sudden rise in the Japanese yen, prompting traders to watch for any indications that authorities might intervene to bolster the currency. A weaker dollar could boost the appeal of gold for investors holding foreign currencies. John Williams, president of the US Federal Reserve Bank of New York, reported evidence suggesting inflation is gradually easing due to the diminishing impact of tariffs, while higher energy prices are not spreading to other services, which eased expectations of an interest rate increase.

This was further supported by recent data showing US companies added jobs at a slower rate in August.

Spot gold increased 0.1% to $4,386.94 per ounce at 7:56 am Singapore time. Silver gained 0.1% to $65.38 per ounce, while platinum and palladium remained unchanged. The Bloomberg Dollar Spot Index, which tracks the US currency, remained stable after falling 0.2% the preceding day.