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What happened: Gold (GC=F) and silver (SI=F) futures jumped more than 3.5% and 6%, respectively, on Wednesday morning.

What’s behind the move: Investors were assessing an Axios report that the US believes it’s close to an agreement with Iran on a one-page memorandum to end the war.

Read more: How to invest in gold in 4 steps

What else you need to know: Gold has been an underperformer during the Iran war, relative to stocks or bitcoin (BTC-USD).

Optimism for a Middle East peace deal had already been boosted by President Trump’s abrupt pause on the US plan to help ships transit the Strait of Hormuz. The US dollar (DX-Y.NYB) eased, lifting the prices of precious metals denominated in the greenback.

Elevated oil prices have raised inflation concerns, leading investors to expect that the Federal Reserve may keep interest rates higher for longer. Because gold does not generate yields, it becomes less attractive relative to bonds and other income-producing assets in a higher-rate environment.

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.

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