Why did gold prices rise following the US-Iran peace deal?

Gold prices rose as the signing of an interim peace deal between the United States and Iran reduced geopolitical uncertainty. The agreement is expected to ease the energy market shocks that have recently driven inflation and pressured global economic stability.

How is the Federal Reserve's stance on interest rates affecting gold?

The Federal Reserve has signaled a potential interest rate hike later this year, with traders fully pricing in monetary policy tightening by October. Higher interest rates are typically a headwind for gold because the metal does not pay interest, making it less attractive compared to yield-bearing assets.

What is the current market sentiment regarding the future performance of gold?

Market sentiment for gold remains largely bearish due to the expectation of interest rate hikes. Analysts suggest that unless there is a notable shift in the Federal Reserve's outlook, the underlying pressure on precious metals is likely to continue.

What happened to other precious metals like silver following the news?

Following the move in gold, silver gained 1.5% to $68.96 an ounce, recovering from a 3% decline in the previous session. Platinum and palladium prices also experienced gains during the same period.

Is the impact of the US-Iran peace deal on oil markets directly influencing gold?

Yes, the US-Iran peace deal is expected to ease energy supply shocks, which helps lower inflation expectations. While lower oil prices provide some support for gold at the margin, the overarching influence of Federal Reserve policy remains the dominant factor in determining price direction.

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Gold rises as US-Iran peace deal optimism counters hawkish Fed

Written by Jon CuthbertPublished Jun 18, 2026, 8:26 AM

Gold (XAU:XAU) rose 1.2% to $4,307.71 an ounce on Thursday following the signing of an interim peace agreement between the United States and Iran.
The precious metal recovered from recent losses despite the Federal Reserve signaling that it intends to implement an interest rate hike later this year.
While the peace deal is expected to alleviate energy-driven inflationary pressures, analysts maintain a cautious outlook as higher rates typically present a headwind for non-interest-bearing assets.

Gold advanced as much as 1.7% to $4,328 an ounce during Thursday's trading session after US and Iranian officials signed an interim peace agreement on Wednesday evening.

The deal aims to resolve the conflict that has disrupted global energy markets, though uncertainty remains regarding the timeline for reopening the Strait of Hormuz for normal shipping traffic.

"Lower oil still helps at the margin," said Oversea-Chinese Banking Corp Strategist Christopher Wong. "But the Fed outcome complicates the story and argues for a cautious near-term read on gold even as the medium-term constructive case has not disappeared."

While the Federal Reserve maintained interest rates in its latest meeting, it removed previous references to additional adjustments, and market participants are now fully pricing in a tightening of monetary policy by October.

"The overall tilt remains bearish for the yellow metal," noted TD Securities Senior Commodity Strategist Ryan Mckay, adding that a significant shift in Fed outlook would be required to alter the current market sentiment.

Gold continues to trade in a complex environment where the easing of geopolitical risk is balanced against a tightening interest rate environment in the United States.

Market participants are now closely monitoring the speed at which energy prices normalize and whether the peace agreement leads to a sustained stabilization of global supply chains.

Gold rises as US-Iran peace deal optimism counters hawkish Fed

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