Gold prices fell about 2% to around $4,400 an ounce on Wednesday, the lowest level in nearly two months, as declining oil prices helped ease fears of another inflation spike. Developments in the Middle East remained in focus, with traders growing increasingly hopeful that the US and Iran could soon reach an agreement to end the conflict and reopen the Strait of Hormuz. The optimism persisted despite mixed signals from both Washington and Tehran, as well as fresh strikes earlier this week. Iranian state television reported details of an unofficial draft memorandum between Tehran and Washington, under which the two countries would restore traffic flows through the Strait of Hormuz, while Iran and Oman would establish a mechanism to manage passage through the waterway. Gold stands nearly 15% below the levels seen at the start of the conflict, as concerns over an energy-driven inflation shock reinforced expectations that major central banks may keep monetary policy tighter for longer.