Gold jumped about 0.9% to $4,755.11 an ounce after President Donald Trump said he would extend a ceasefire with Iran. The move reversed two days of losses as markets read the announcement as a reduction in near‑term geopolitical risk.

Markets pivot as ceasefire talk soothes immediate risk

Spot gold rose about 0.9% on Wednesday to $4,755.11 per ounce as markets reacted to news that the United States would extend a ceasefire with Iran, reversing losses from the prior two days.

U.S. gold futures for June delivery advanced roughly 1.1% to $4,772.90. Traders had pushed bullion to its lowest level since 13 April on Tuesday before the reversal.

Oil prices dropped sharply after President Donald Trump announced the extension, a move that investors read as a possible de‑escalation in the Middle East. The slide in crude softened inflation fears and eased some upward pressure on interest rates — both important drivers for the non‑yielding safe‑haven metal.

What drove the swings: ceasefire, oil and data

The immediate trigger was Mr Trump’s announcement. He said he would extend the ceasefire to allow for further peace talks; his statement preceded the scheduled expiry of the temporary pause and appeared to be unilateral, with questions remaining about Iran’s and Israel’s willingness to accept an extension.

Mastheads

Crude fell by about 15% on the news, sliding from intraday highs near $117 per barrel to roughly $95, according to market moves recorded early on Wednesday. That plunged energy‑linked inflation expectations and gave gold room to recover.

But the story had been more complicated just a day earlier. On Tuesday, stalled talks between Washington and Tehran and stronger U.S. data pushed the dollar and Treasury yields higher, which hurt bullion. A market note cited by trading desks warned that price action remained vulnerable to ceasefire headlines and liquidity needs.

What analysts and officials are saying

Edward Meir, an analyst at Marex, said the ceasefire extension changed market perception by creating the prospect of fewer near‑term hostilities. "With this ceasefire extension, the markets perceive a de‑escalation in the crisis," he said. Meir added that if hostilities resumed, the dollar would likely strengthen, oil and rates would rise and that would put downward pressure on gold.

Standard Chartered, in a client note, described bullion’s recent moves as fragile and heavily tied to headlines from the Middle East. The bank said it still expects precious metals to recover and sees gold testing prior record highs, though near‑term corrections remain a risk.

Separately, Federal Reserve nominee Kevin Warsh told senators he had made no promises to Mr Trump about cutting interest rates and stressed the Fed’s independence while outlining his plans for reforms at the central bank. His testimony reinforced the theme that U.S. monetary policy remains a key wildcard for gold: higher yields lift the opportunity cost of holding non‑yielding bullion.

Other markets: stocks, dollar and commodities

  • Risk assets: Futures tied to the S&P 500 jumped more than 2.7%, Dow futures gained about 2.5% and Nasdaq 100 futures climbed roughly 3.5%.
  • Currency and metals: The U.S. dollar eased after the announcement; spot silver gained about 1.5% to $77.84 per ounce, platinum rose to roughly $2,067 and palladium moved higher to the mid‑$1,500s.

That broad lift across metals reflected the wider market reaction to the ceasefire news.

This eased oil prices and softened inflation expectations, lowering upward pressure on interest rates — factors that often influence gold's appeal. The article's reference to Federal Reserve nominee Kevin Warsh also highlights how quickly changes in U.S. yields can alter bullion's market dynamics.

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Markets will now watch whether Iran and Israel accept the extension; if they do not, oil and yields could rise again and quickly reshape bullion's path. President Donald Trump said the ceasefire would be extended indefinitely to allow further talks.

This article was created with AI assistance.