Gold rebounds over 2% in a single day, oil prices decline easing inflation concerns, Goldman Sachs still sees year-end at $5,400

The progress in US-Iran negotiations has driven oil prices down, easing inflation concerns, and gold rebounded on Wednesday. CNBC reports that spot gold rose over 2.56% to $4,588 per ounce, while April-delivered gold futures surged more than 4% to $4,597.7.

Trump says US-Iran “are negotiating,” causing oil prices to fall

On Tuesday, Trump stated in the Oval Office that the US and Iran are “currently negotiating,” and that Tehran is eager to reach a peace agreement. He explained that his decision to withdraw the threat of strikes on Iran’s energy infrastructure was “based on the fact that we are negotiating.” “They are talking to us, and it makes sense.”

Affected by this, international benchmark Brent crude futures fell about 6% to $98.31 per barrel, and US WTI crude futures dropped about 5% to $87.65. The decline in oil prices reduces the pressure from energy-driven inflation, supporting gold — lower oil prices suggest supply shocks may be easing, and market concerns about long-term inflation are cooling. The US dollar index also weakened slightly.

Goldman Sachs: Pullback is normal, year-end target remains at $5,400

Daan Struyven, Co-Head of Global Commodities Research at Goldman Sachs, said in a media briefing that the recent correction in gold aligns with historical patterns, mainly due to rising interest rate expectations and increased market volatility. “We do not find the recent decline surprising.”

He pointed out that gold ETFs are highly sensitive to interest rates, and rising rate expectations directly suppress investor demand. During periods of extreme market stress, investors facing margin calls often sell gold along with other assets. Struyven believes that the recent rally in gold has exceeded fundamentals, and some of the correction reflects “normalization.”

Despite this, Goldman Sachs maintains a structurally bullish outlook, predicting gold will reach $5,400 by the end of the year. The supporting factor is ongoing central bank purchases — central banks are actively diversifying assets into “geopolitically and financially lower-risk” assets. Notably, even after today’s rebound, gold prices are still about 17% below the high at the end of January.

This article, gold’s single-day rebound of over 2%, falling oil prices easing inflation fears, and Goldman Sachs’ outlook of $5,400 by year-end, first appeared on Chain News ABMedia.