Gold Jumps Above $4,800 as Dollar Slides

U.S. gold futures advanced 1.4% to $4,833.10, with silver up 4.7% and platinum gaining 0.9%, while palladium dipped 0.2%. Bob Haberkorn at RJO Futures attributed the bullion boost to "lower dollar, lower oil." The dollar index fell to 98.05, its lowest since March 2, as traders interpreted the administration's stance as an "exit ramp" from conflict, according to Karl Schamotta at Corpay.

Gold found further support from lighter-than-forecast U.S. inflation numbers, with March producer prices climbing 0.5%, well below the 1.1% economists expected, as noted by Christopher Rupkey of FWDBONDS. This is crucial for gold, which offers no yield and typically struggles with higher interest rate expectations.

Oil prices reacted to diplomatic hopes, with Brent crude sliding to $95.43 a barrel and U.S. crude dropping to $92.48, reversing Monday's surge past $100. John Kilduff of Again Capital called this a bet on "a better outcome," as cheaper oil eases inflation concerns, benefiting gold.

However, the market remains volatile; Monday saw spot gold fall 0.3% to $4,734.50 after weekend peace talks collapsed, described as a "headline-driven market" by Phillip Streible at Blue Line Futures. CME FedWatch data showed traders pricing in only a 29% chance of a U.S. rate cut by year-end, down from 40% a month prior.

The International Energy Agency reported the war removed 10.1 million barrels per day of oil supply in March, highlighting the Strait of Hormuz's restart as a key wildcard. Saxo's Charu Chanana warned that "Markets are trading hope, not resolution," indicating gold's gains could quickly vanish if negotiations fail or oil prices surge.