Gold (XAU/USD) climbed nearly 1.5% on Wednesday, reaching a three-week high of $4,857 before settling around $4,771, following the announcement of a two-week ceasefire between the United States and Iran [1]. US President Donald Trump stated on Truth Social that attacks on Iran would be suspended for two weeks, contingent on Tehran ensuring the 'complete, immediate, and safe opening of the Strait of Hormuz.' Iran’s Foreign Minister Abbas Araghchi confirmed that safe transit through the Strait could be maintained during this period in coordination with Iranian armed forces [1]. The first round of negotiations is scheduled for Friday in Islamabad, where Iran’s 10-point peace proposal will be discussed. Trump described the proposal as 'a workable basis on which to negotiate' [1].
The ceasefire news eased fears of a prolonged conflict, boosting global market sentiment and triggering a risk-on rally. Equities surged while the US Dollar Index (DXY) dropped nearly 0.90% to 98.77, putting broad pressure on the Greenback and supporting gold prices [1]. Oil prices also retreated sharply, with WTI falling more than 10% to trade near $87, which helped ease inflation concerns and may reduce the need for tighter monetary policy from major central banks [1].
Despite the positive momentum, gold lacked strong follow-through buying as traders expect the Federal Reserve to remain patient before resuming rate cuts. Recent US Nonfarm Payrolls (NFP) data pointed to a stable labor market, and oil prices remain above pre-conflict levels, keeping inflation risks in focus [1]. Investors are awaiting the Fed’s minutes from the March meeting, due later in the American session, for further guidance on monetary policy [1].
Technical analysis shows XAU/USD trading between key moving averages, with price holding beneath the 50-day SMA at $4,928.81 and above the 100-day SMA at $4,667.89. Momentum indicators suggest buyers retain a slight edge, but price remains capped by overhead resistance levels [1].
CONCLUSION
The US-Iran ceasefire has lifted gold prices and global equities, while weakening the US Dollar and easing oil-driven inflation concerns. However, gold's gains remain capped as traders await further signals from the Federal Reserve and monitor ongoing negotiations. The market is cautiously optimistic, with sentiment supported by reduced geopolitical risk and improved risk appetite.