Gold holds loss as traders weigh prospects for US-Iran deal

Gold held a loss, as fresh clashes in the Persian Gulf weighed on hopes for a US-Iran peace deal and reinforced concerns that inflation could keep interest rates higher for longer.

Bullion traded just above $4 500 an ounce in Asian hours on Wednesday, having fallen 1.4% on Tuesday. Hostilities between US and Iranian forces near the Strait of Hormuz occurred even as both sides touted progress toward an interim peace deal, with US Secretary of State Marco Rubio saying that any pact would likely take a few days to finalize.

Despite the impasse, confidence was growing that the three-month conflict will remain contained, with traders seizing on signs of diplomatic progress even as attacks continued. The risk-on mood has lifted equities to fresh highs.

“While hope of a US-Iran deal has offered some support, the situation remains fragile and persistent, as inflation fears continue to loom over precious