Gold Prices Rise Following US-Iran Peace Agreement Announcement

Gold prices increased after the announcement of a peace agreement between the United States and Iran on Sunday, reflecting rapid shifts in financial markets as geopolitical concerns eased.

Spot gold rose by 1.8% to $4,297.42 per ounce by 00:10 GMT, reaching its highest level since June 9. Additionally, US gold futures for August delivery climbed 1.9% to $4,318.10.

Asian stock markets advanced on Monday, while the US dollar weakened and oil prices declined, as news of the US agreement with Iran encouraged risk appetite among investors.

Gold prices had been under pressure since the onset of the US-Israeli war against Iran in late February. The recent rise coincided with investors seeking safe-haven assets while assessing the agreement's impact on geopolitical stability and trade flows.

Although gold is typically viewed as an inflation hedge, its appeal diminishes when interest rates rise. The CME Group's FedWatch tool currently shows a 68% probability that the US Federal Reserve will raise interest rates by December following the peace deal, down slightly from 69% the previous week.

US President Donald Trump announced the agreement with Iran, stating that the Strait of Hormuz would be fully reopened for navigation without fees. Trump declared on the social media platform Truth Social: "The US naval blockade on Iran is lifted immediately after reaching the agreement," adding, "To the ships of the world, start your engines... let the oil flow!"

Pakistani Prime Minister Shehbaz Sharif confirmed the peace agreement between the two sides, which includes an immediate and permanent ceasefire. He announced that the signing ceremony is scheduled for June 19 in Switzerland, with regional mediators participating.

Sharif posted on the platform X that both parties have declared an immediate and permanent halt to military operations on all fronts, including Lebanon. He detailed that the official signing ceremony will take place on Friday, June 19, in Switzerland, and that mediators will facilitate a series of meetings throughout the week as the agreement comes into effect.

He expressed gratitude to the United States and Iran for their commitment to a diplomatic resolution and thanked Qatar, Saudi Arabia, and Turkey for their roles in mediation efforts.