Gold and Silver Prices Rise Amid De-escalation of US-Iran Tensions

Global Markets React to US-Iran Ceasefire Agreement

The global markets experienced a significant surge in gold and silver prices following the announcement of a two-week ceasefire between the US and Iran. The COMEX gold rate jumped up to 7% on Wednesday, reaching as high as $4,850 per ounce, building on a 1.2% increase from the previous session. Meanwhile, COMEX silver prices rose nearly 6.80% to $76.92 per ounce during the Asian trading hours.

The ceasefire agreement, which was announced by US President Donald Trump, marks a significant development in the US-Iran conflict that has unsettled global markets. The conflict, which started at the end of February, has led to a decline in gold prices of around 10% and silver prices of over 17%. However, a modest rebound in recent days has been supported by optimism around a potential ceasefire and expectations that slowing global economic growth could offset expectations of steady or higher interest rates.

Ceasefire Details

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The two-week ceasefire agreement was announced after US President Donald Trump received a 10-point proposal from Iran, which he called a workable starting point for negotiations. Trump also warned that Tehran needed to reopen the Strait of Hormuz or face potential US retaliation. Iran responded that safe passage through the strait could be ensured for the two weeks. Pakistan, acting as a mediator between Washington and Tehran, had sought a two-week extension to allow diplomatic efforts to move forward.

The ceasefire agreement has led to a drop in oil prices below $100 per barrel, and the dollar has weakened, supporting gold prices. The metal is priced in US currency, and a weaker dollar makes it more attractive to investors.

Gold and Silver Prices Outlook

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According to Ross Maxwell, Global Strategy Operations Lead at VT Markets, gold and silver prices are likely to remain volatile through the rest of the year, with a modest upward bias as long as macro conditions stay supportive. Maxwell noted that gold may continue to benefit from its safe-haven appeal, especially if geopolitical tensions persist or economic growth slows, while silver could see more mixed performance given its role as an industrial metal if high energy prices persist and have a negative impact on global growth.

Renisha Chainani, Head of Research at Augmont, expects gold prices to trade in the range of $4580 or ₹144,000 to $4800 or ₹154,000 this week, with a potential breakout or breakdown. Chainani also expects silver to trade in the range of $67 (₹215,000) to $77 (₹243,000) this week before giving a breakout or breakdown.