Gold prices held steady on Wednesday as investors took a careful approach, evaluating the economic impacts of the Middle East conflict while awaiting the upcoming policy decision from the U.S. Federal Reserve. Spot gold held steady at $5,003.77 per ounce as of 0058. Gold futures in the U.S. for April delivery held steady at $5,008.70. Oil prices stayed high, exceeding $100 a barrel, as renewed Iranian attacks on the United Arab Emirates heightened worries about the global supply situation.

The assassination of Ali Larijani, Iran’s security chief and the highest-ranking official targeted since the beginning of the U.S.-Israeli conflict, has notably escalated tensions. A high-ranking Iranian official stated that the country’s new supreme leader has rejected de-escalation proposals put forth by intermediary nations. U.S. President Donald Trump stated that Washington is not ready to pull back its military presence in Iran at this moment, but he noted, “We’ll be leaving in pretty much the very near future.” The Strait of Hormuz, crucial for around 20% of the world’s oil transport, remains largely inaccessible, with Iran making threats towards tankers linked to the United States and Israel.

The closure of the Strait has kept crude prices high, adding to inflationary pressures by raising transportation and manufacturing costs. The current inflation landscape typically strengthens gold’s position as a protective asset; nonetheless, high interest rates reduce the metal’s appeal by increasing returns on investments that generate yields. The Federal Reserve is expected to keep its current interest rates steady for the second meeting in a row when it announces its policy decision later today.

Central banks in the UK, euro zone, Japan, Canada, Switzerland, and Sweden will meet this week for their first discussions after the start of the Iran war. Spot silver rose by 0.2% to $79.46 per ounce. Spot platinum held steady at $2,124, while palladium saw a slight decrease of 0.2%, closing at $1,598.84.