Ceasefire news arrives, gold prices surge

The two-week ceasefire announced following negotiations aimed at ending the ongoing conflict between US President Donald Trump and the Iranian side has caused significant volatility in financial markets. Following these developments, gold prices reached their highest levels in the last two months.

In a statement made via social media, Trump noted that Iran had announced a pause in operations less than two hours before his own self-imposed deadline to destroy its "entire civilization," emphasizing that the condition for the reopening of the Strait of Hormuz was a priority for the ceasefire. A statement from the Iranian side indicated that the strait could be safely opened over the next two weeks.

Bullion gold, which gained 1.2 percent in the previous session, rose 3.1 percent to over 4,850 dollars per ounce following the new developments. At the same time, silver also saw a remarkable increase of 5.4 percent, with its price reaching 76.92 dollars.

The price of a barrel of oil fell below 100 dollars after the ceasefire, while the US dollar experienced a 0.8 percent decline against other currencies. This situation supported gold prices, which are traded in dollars. Stock markets recorded gains of over 2 percent.

Gold and stocks have continued their volatile movements in recent weeks due to the crisis spreading in the Middle East. The fact that the war has somewhat weakened the traditional "safe haven" effect of gold has led investors to rebalance their portfolios. Experts point out that the expected slowdown in global economic growth and expectations for interest rates to remain stable or high have supported the recent recovery in gold.

As the conflict enters its sixth week, the rise in energy prices and inflationary pressures have caused central banks to delay interest rate cuts or even consider new hikes. Market expectations have formed around the idea that the US Federal Reserve (Fed) will keep interest rates steady for the remainder of the year.

As of 08:02 Singapore time, spot gold was trading at 4,849.01 dollars per ounce, a gain of 3 percent. Platinum and palladium prices also showed increases. All these developments indicate that uncertainty will continue to influence the global financial atmosphere for some time.

News Source: 12punto