Ankara: Gold prices climbed more than 3% on Wednesday, reaching $4,700 per ounce, as renewed diplomatic signals from Tehran and Washington raised hopes that tensions around the Strait of Hormuz could ease after weeks of conflict and military escalation.

According to Anadolu Agency, investor sentiment improved following reports that the White House believes it is nearing a deal with Iran on a one-page memorandum of understanding aimed at ending the war and establishing a framework for broader nuclear talks. Washington expects a response from Tehran on several key issues within the next 48 hours, Axios reported, citing two US officials and two other sources familiar with the matter.

The diplomatic developments followed US President Donald Trump's announcement Tuesday that the US military would temporarily pause 'Project Freedom,' Washington's operation to secure commercial shipping through the Strait of Hormuz. Trump said the decision was made at the request of Pakistan and several other countries.

Pakistani Prime Minister Shehbaz Sharif on Wednesday welcomed Trump's decision to pause the operation, expressing hope that the current momentum would lead to a lasting agreement ensuring durable peace and stability in the region and beyond. 'Pakistan remains firmly committed to supporting all efforts that promote restraint and a peaceful resolution of conflicts through dialogue and diplomacy,' Sharif wrote on US social media company X.

The Strait of Hormuz remains one of the world's most critical energy chokepoints, and weeks of military escalation around the waterway have kept investors focused on risks to global shipping, oil flows, and broader financial markets. Gold, traditionally viewed as a safe-haven asset during periods of geopolitical uncertainty, has remained highly sensitive to developments in the region as markets assess whether the latest diplomatic push can reduce the risk of further escalation.