Spot gold was last up 2.3% at $4,577.55 an ounce

Gold prices jumped more than 2% in Asian trading on Wednesday, supported by a decline in oil prices and a weaker U.S. dollar, as reports of a potential Middle East ceasefire reduced inflation concerns and boosted the metal’s appeal.

Spot gold was last up 2.3% at $4,577.55 an ounce by 03:06 GMT. U.S. Gold Futures climbed 4% to $4,611.70.

Investors reacted to reports that the U.S. had sent Iran a 15-point plan aimed at ending the war in the Middle East.

U.S. president said Washington was “in negotiations” with Iran.

The president had earlier described talks with Iran as “productive” earlier this week, although Iranian officials denied that any negotiations were taking place, highlighting continued uncertainty around the diplomatic outlook.

Oil prices, which had soared in previous sessions on supply disruption fears, slid sharply on Wednesday, with Brent crude dropping below $100 a barrel.

The decline in oil prices helped support gold by easing inflation expectations, which in turn reduced pressure on central banks to keep interest rates higher for longer.

Lower energy costs can dampen bond yields and weaken the dollar, both of which tend to benefit non-yielding assets such as gold.

The US Dollar Index dropped 0.2% in early trading on Wednesday.

Gold had come under heavy pressure in recent sessions as rising oil prices and bond yields fuelled inflation fears and strengthened the dollar, triggering a broad selloff in precious metals.

Despite Wednesday’s rebound, analysts said volatility is likely to persist, as markets remain highly sensitive to headlines around the Middle East conflict.