The core event across all sources is US President Donald Trump's decision to postpone planned military strikes against Iranian power plants and energy infrastructure, which has had significant effects on both Gold and Oil markets [2][3]. Gold (XAU/USD) rebounded from year-to-date lows on Monday, trading around $4,455 after briefly dropping below $4,100 during the Asian session, its lowest level since November 2025 [2]. The rebound was attributed to bargain hunting and the easing of geopolitical tensions following Trump's announcement [2]. Meanwhile, WTI Oil prices dropped sharply, trading around $92.20, down 5.45% on the day, after falling from $100 to a daily low of $83.99, the lowest in more than a week [3]. The decline was triggered by reduced expectations of supply disruptions in the Middle East due to the strike delay [3].
Despite the temporary easing, uncertainty remains high. Iran’s Fars News Agency reported that there are no direct or indirect communications with the US, highlighting the fragility of any potential de-escalation [2][3]. Reciprocal threats concerning the Strait of Hormuz continue to fuel market volatility, with Iran warning it could target US and Israeli energy, IT, and desalination infrastructure if the Strait is not reopened within forty-eight hours [2].
Market implications are significant. The easing of tensions led to a pullback in the US Dollar and Treasury yields, while Oil prices remain elevated despite the intraday drop, keeping inflation concerns in focus [2]. Markets have priced out Federal Reserve interest rate cuts for this year, and expectations for further tightening in other major economies have strengthened [2]. Higher interest rates increase the opportunity cost of holding non-yielding assets such as Gold [2]. Analysts, including Vandana Hari of Vanda Insights, remain cautious, noting that Oil market sentiment may remain unstable in the short term, with longer-term direction dependent on Middle East Oil flows [3]. The International Energy Agency (IEA) is consulting with Asian and European governments about a possible release of strategic reserves, which could temporarily ease price pressures but not resolve structural imbalances caused by the conflict [3].
TD Securities’ Senior Commodity Strategist Daniel Ghali sees Gold’s long-term outlook as healthy but the medium-term constrained, with Commodity Trading Advisors (CTAs) at risk of fully exiting their remaining gold longs, potentially resulting in a flat position for the first time in more than two years [1]. Ghali notes that Middle Eastern USD surpluses, previously recycled into gold, are now pressured by higher energy costs and the Iran conflict, straining the bull trend [1]. Technical analysis shows XAU/USD rebounded from the 200-day SMA near $4,095, preserving the broader uptrend, but the near-term bias remains slightly bearish [2].
Looking ahead, markets will closely monitor geopolitical developments for direction, with little US economic data scheduled on Monday [2]. The Supreme Court's upcoming decision on the Lisa Cook trial is also cited as a factor contributing to short-term vulnerability in Gold [1].
CONCLUSION
The postponement of US strikes against Iran has temporarily eased geopolitical tensions, leading to a rebound in Gold and a sharp drop in Oil prices. However, persistent uncertainty and elevated inflation concerns are keeping markets volatile, with central banks signaling higher rates and analysts warning of ongoing risks. Investors remain focused on geopolitical developments and central bank actions for further direction.