Gold extended its gains to around $4,250 an ounce on Wednesday, reaching its highest level since June 18, as easing geopolitical tensions and softer US labor market data reinforced expectations of a less aggressive Federal Reserve. President Donald Trump said the US and Iran held "very good discussions" on Tuesday, raising hopes of a deal to end their five-month conflict. The prospect of restored Middle Eastern energy supplies has pushed oil prices down about 10% this week, easing inflation concerns and reducing expectations for further Fed tightening. Meanwhile, the ADP Employment Report showed the US economy added just 44,000 private-sector jobs in July, the weakest reading since January and well below forecasts of 70,000. Traders now see a 57% chance of a September Fed rate hike, down from 67% a day earlier. Still, Kansas City Fed President Jeff Schmid said some additional policy tightening may be needed to bring inflation back to the central bank's 2% target.