Gold erased earlier losses on Wednesday after Axios reported that the US and Iran are nearing a truce agreement to extend their ceasefire, pending final approval from President Donald Trump. The precious metal surged as much as 0.4% immediately following the news, reversing morning declines and signaling renewed investor confidence in the diplomatic breakthrough.

Market reaction was swift across asset classes. Bullion's gain coincided with a drop in Treasury yields and a weakening dollar, as investors rotated out of safe-haven assets typically favored during geopolitical uncertainty. The Axios report outlined specific terms: Iran would need to remove Hormuz mines within 30 days, and the US naval blockade would be lifted upon deal approval.

This development carries significant weight for global commodities markets and Middle Eastern shipping lanes. Gold's bounce reflects the metal's sensitivity to geopolitical risk premiums, while lower yields suggest traders are rethinking their safe-haven positioning amid easing tensions.

The truce framework offers a potential pathway for sustained de-escalation in the region, though investors remain cautious until Trump signs off. Gold's immediate rally demonstrates how quickly markets price in reduced geopolitical risk when credible diplomatic progress emerges.