By: Economy Middle east

Gold prices firmed on Wednesday as lower oil prices eased fears of an inflation spike and a longer period of high interest rates after the U.S. extended its ceasefire with Iran.

Spot gold rose 1.12 percent to $4,753.82 per ounce as of 8:58 UAE time, after hitting its lowest level since April 13 on Tuesday. U.S. gold futures for June delivery gained 1.13 percent to $4,772.74.

In the UAE, local gold rates posted notable gains. 24-carat gold rose AED 7.25 to AED 572.25, while 22-carat climbed AED 6.75 to AED 529.75. 21-carat gold increased AED 6.50 to AED 508.00, 18-carat rose AED 5.50 to AED 435.50, and 14-carat gained AED 4.50 to AED 339.75.

U.S. President Donald Trump said he would indefinitely extend the ceasefire with Iran to allow more peace talks, lifting stocks, easing the dollar and pushing oil prices lower.

Higher crude prices can feed inflation by raising transport and production costs. Gold is often used as an inflation hedge, but high interest rates can reduce its appeal by making yield-bearing assets more attractive.

Meanwhile, Federal Reserve chief nominee Kevin Warsh said he had made no promises to Trump about cutting rates and would act independently if confirmed.

Among other metals, spot silver rose 2.16 percent to $78.03 per ounce, platinum gained 1.38 percent to $2,073.75, and palladium advanced 1.11 percent to $1,546.00.