Negotiations for a ceasefire between the US and Iran are showing signs of progress, causing gold to rebound for two consecutive days. The market is betting on the future "exit path."

As traders weigh the prospects of a ceasefire negotiation between the US and Iran, the price of gold has risen for the second consecutive trading day. The price of gold rose by as much as 2.8%, following a 1.6% increase from the previous trading day. White House press secretary Caroline Levitt insisted on Wednesday that peace talks with Iran are still ongoing. Meanwhile, Iran has openly rejected US overtures and has set new conditions for ending the conflict that has had a severe impact on the Middle East and global markets. Helene Amos, a commodity analyst at Montreal Bank Capital Markets, stated that despite the back-and-forth between both sides, actions from the US have indicated "an intent to move towards some kind of resolution. The US is trying to open dialogue, and I think that's key." Amos commented on the conflict, saying, "The market is starting to see some kind of exit path in the coming weeks." She added that this has brought about a "decent bounce" in precious metal prices, but "there is no concrete evidence yet that speculative funds will return to this area." Since the outbreak of the war over three weeks ago, the movement of gold has largely been in sync with the stock market and has had an inverse relationship with oil. Rising energy prices have increased inflation risks, leading investors to bet that the Federal Reserve and other central banks will maintain or opt to raise interest rates, which is a negative factor for gold, which does not yield interest. Mark Haefele, Chief Investment Officer at UBS Global Wealth Management, wrote in a report on Wednesday that decreasing investor positions, declining purchasing power in the Middle East, and expectations of rate hikes are all putting pressure on the price of gold. "With some of these factors possibly reversing in the coming months, we believe now is a good time to increase positions in gold." As of the time of writing, spot gold has risen by 0.07% to $4509.78 per ounce. Silver has dropped by 0.76% to $70.71, following a 3% increase from the previous trading day. Platinum has risen while palladium has fallen, and the Bloomberg Dollar Spot Index has seen a slight increase.