A breakthrough agreement between Washington and Tehran helped push gold higher, even as traders digested the Federal Reserve’s warning that rates could rise later this year.
Gold prices climbed on Thursday after the United States and Iran signed an interim peace agreement, easing fears over global energy supplies. The gains came despite a hawkish message from the Federal Reserve, which signaled that tighter monetary policy remains on the table.
Key Details
Spot gold rose as much as 1.7% to $4,328 per ounce, recovering losses from the previous session. By 9:21 a.m. Singapore time, gold was trading 1.6% higher at $4,322.83.
The peace deal was signed electronically on Wednesday evening, although uncertainty remained over whether the Strait of Hormuz had reopened. The agreement is expected to reduce pressure on global energy markets and ease concerns about inflation fueled by higher oil prices.
Oil prices fell following the announcement, reflecting expectations that supply disruptions could gradually improve.
Meanwhile, the Federal Reserve left interest rates unchanged but reaffirmed its commitment to controlling inflation. Markets are now fully pricing in a rate hike by October, a development that typically weighs on non-yielding assets such as gold.
Analysts said the prospect of higher rates had largely been anticipated before the Fed’s latest decision, limiting its immediate impact on precious metals.
Market Reaction
Gold: +1.6% to $4,322.83 per ounce
Silver: +2.5% to $69.61 per ounce
Platinum: Higher
Palladium: Higher
US Dollar Index: -0.2%
Oil: Declined after the peace agreement announcement
Why It Matters
Traders are balancing two powerful forces: easing geopolitical tensions, which reduce demand for safe-haven assets, and expectations for higher US interest rates, which can pressure gold prices. The market is now watching which factor will have the stronger influence in the coming weeks.
Attention now turns to the implementation of the US-Iran agreement, developments around the Strait of Hormuz, and upcoming US economic data that could shape the Fed’s next move. Any shift in inflation expectations or rate-hike forecasts could drive the next major move in gold.
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Source: Yahoo Finance
Time: 1:30 PM EEST
