Spot gold prices were higher on Wednesday, as investors weighed a recent jump in government bond yields and a stronger dollar against hopes for a detente in the Iran war.

By 09:13 ET (13:13 GMT), spot gold was higher by 0.4% at $4,502.50 an ounce, after sliding to its lowest level since late March earlier in the session. Meanwhile, gold futures pared back some initial losses to fall by 1.1% to $4,508.00 an ounce.

Worries have swirled around whether an Iran-linked oil price spike will create a global inflation wave and trigger central bank interest rate hikes, analysts at Phillip Capital said in a note.

Government bond yields have risen sharply in recent days as a result. Notably, the yield on the 30-year U.S. Treasury bond, known as a gauge of how traders view the economic outlook, soared to levels not hit since the global financial crisis almost two decades ago. Yields tends to move in the opposite direction to prices.

Elevated borrowing costs may not bode well for non-yielding assets like gold. At the same time, the U.S. dollar has hovered around a six-week high, possibly making bullion more expensive for overseas buyers.

“[G]old and the dollar have a close inverted correlation, something which happens from time to time,” said David Morrison, Senior Market Analysts at Trade Nation, in a note.

More insight into the path ahead for Federal Reserve interest rates may come later today, when the central bank is due to release minutes from its April meeting.

Still, hopes remained that the U.S. and Iran may be able to forge a deal to end their more than two-month war.

U.S. President Donald Trump told lawmakers on Tuesday evening that the Iran war could end “very quickly.” He said earlier this week that he had postponed planned fresh attacks on Iran at the request of three Gulf countries.

Vice President JD Vance also struck an optimistic tone in separate comments, stating that Tehran wanted to make a deal.

Meanwhile, two Chinese-flagged supertankers carrying oil exited the Strait of Hormuz on Wednesday, Reuters reported, citing LSEG and Kpler shipping data. South Korean-flagged Very Large Crude Carrier Universal Winner is also leaving the narrow waterway off of Iran’s southern coast, which has been effectively closed to tanker traffic since the start of the U.S.-Israeli war on Iran in late February.

Oil prices fell, echoing optimism that crimped supply flows through the strait may be more fully unlocked. Still, Brent crude futures, the global oil benchmark, remain well above pre-war levels.

“The prospects for U.S.-Iran negotiations remained uncertain, with Iran insisting on its core demands and Trump signaling a possible renewed strike on Iran,” said Neil Welsh, Head of Metals at Britannia Global Markets, in a note.