Gold prices lost some steam on Wednesday after an extended rally took them to $5,100/oz, as signs of renewed tensions between the U.S. and Iran drummed up safe haven demand for bullion. 

At 11:09 ET (16:09 GMT), Spot gold was down 0.5% to $4,922.64/oz, while gold futures for April were up 0.2% to $4,945.55/oz. The former hit a session high earlier at $5,092.31/oz, while the latter rose to $5,113.50/oz.   

After suffering its worst two-day rout since 1983, gold bounced back on Tuesday with its best daily intraday gain in more than 17 years.

"Gold saw a sharp drawdown last week within its strong secular uptrend," Fairlead Strategies said on Wednesday. 

"Even so, intermediate-term momentum remains firmly positive, suggesting the 50-day (~10-week) MA near $4,500/oz should hold for now. The daily cloud...puts more important support near $4,240/oz, and minor resistance is now defined by the all-time high near $5,500/oz," Fairlead added.

Iran worries resurface ahead of nuclear talks

Concerns over rising tensions between the U.S. and Iran has been a major driver of haven demand, especially after overnight reports showed the U.S. shot down an Iranian drone in the Arabian sea.

Separately, Iranian gunboats were seen approaching a U.S.-linked tanker in the Strait of Hormuz. 

The two events somewhat undermined comments from Tehran and Washington that they will hold talks this Friday. News of the talks had offered markets some relief and dented haven demand for gold. 

Recent losses in gold were driven chiefly by bets that U.S. President Donald Trump’s nomination for head of the Federal Reserve, Kevin Warsh, will be less dovish than markets were hoping.

This sparked a sharp increase in the dollar, which in turn pressured metal markets. Gold was also open to profit-taking after surging to a record high of nearly $5,600/oz last week.

But despite recent losses, gold was still trading up over 15% so far in 2026. 

"Safe‑haven demand, ongoing central‑bank buying, and the outlook for real rates remain supportive over the medium term," according to analysts at ING, in a note.

"Although shorter-term dynamics triggered the latest rally, the foundation of gold’s multiyear uptrend continues to rest on steady official‑sector accumulation. This trend began in 2022 following Russia’s invasion of Ukraine. Although central bank purchases moderated slightly last year, institutions remain significant net buyers."

Silver, platinum rebound; OCBC sees gold strength persisting

Other precious metals also advanced on Wednesday, extending a recovery from the prior session.

Spot silver rose 2.5% to $87.2815/oz, and spot platinum added 1% to $2,232.65/oz. 

"The rebound suggests that forced selling and margin-related liquidation pressures may have faded, at least for now," OCBC analysts wrote in a note. 

But they cautioned that the recovery still appeared shaky, especially as "sensitivity to the USD, yield repricing, and uncertainty around Fed policy under new leadership remains high."

Still, OCBC viewed the recent gold price rout as a price normalization, rather than a "trend reversal." 

The brokerage said that gold was likely to continue benefiting from central bank demand, while geopolitical and fiscal risks will continue to underpin haven demand.

Silver is also expected to benefit from its dual role as a precious and industrial metal.

OCBC reiterated its end-2026 targets for gold and silver at $5,600/oz and $133/oz, respectively. 

Ambar Warrick and Peter Nurse contributed to this article