Gold Surges Above $4,300
Gold prices climbed above the $4,300 per ounce mark on Monday, extending gains for a third consecutive session after the United States and Iran reached a preliminary peace agreement aimed at easing tensions in the Middle East and stabilising global energy markets.
Spot gold rose to $4,336.74 per ounce, representing a 2.72 percent increase on the day, as investors reacted to a sharp decline in oil prices triggered by the announcement of the deal. Brent crude fell to a two-month low, helping to ease inflation expectations linked to energy costs and reducing immediate pressure on central banks to tighten monetary policy further.
Peace deal boosts market sentiment
The agreement, expected to be formally signed in Switzerland on June 19, reportedly includes provisions for reopening the Strait of Hormuz, easing sanctions on Iran, restoring energy flows, and gradual steps toward dismantling Tehran’s nuclear programme, according to officials involved in the negotiations.
Markets responded positively to the prospect of reduced geopolitical risk, with energy traders pricing in improved supply stability and lower disruption risks across global shipping routes.
Inflation outlook and central bank focus
The easing of geopolitical tensions has shifted investor attention toward upcoming monetary policy decisions by major central banks.
The US Federal Reserve, now under newly appointed Chair Kevin Warsh, is widely expected to maintain interest rates at its upcoming policy meeting. Similarly, the Reserve Bank of Australia is projected to hold rates steady, while the Bank of Japan is reportedly considering a possible rate hike to support its currency.
Lower energy prices have reduced near-term inflation concerns, strengthening the case for a pause in aggressive monetary tightening across advanced economies.
Gold maintains strong annual gains
Gold, traditionally viewed as a safe-haven asset during periods of uncertainty and inflation, has benefited from shifting expectations in energy and monetary policy markets.
Despite recent volatility, the metal remains approximately 5 percent lower over the past month. However, it is still up more than 28 percent year-on-year, reflecting sustained demand driven by geopolitical tensions, inflation concerns and broader macroeconomic uncertainty.
Analysts say the recent rally underscores gold’s continued role as a hedge against global instability, even as improving diplomatic conditions temporarily ease pressure on energy markets.
