Table of Contents
Gold Prices Surge Amid US-Iran Ceasefire Agreement
On Wednesday, Gold (XAU/USD) surged towards a three-week high, trading at approximately $4,803, after a temporary ceasefire agreement between the United States and Iran was announced. This news provided relief to markets that had been fraught with escalating tensions, pushing gold up nearly 2% for the day, following an intraday high of $4,857.
US-Iran Ceasefire Bolsters Market Confidence
US President Donald Trump revealed on Truth Social that he has agreed to suspend military actions against Iran for two weeks, contingent on Iran’s commitment to ensure the “complete, immediate, and safe opening of the Strait of Hormuz.” Iran’s Foreign Minister Abbas Araghchi also confirmed that safe transit through the Strait would be maintained in coordination with Iranian armed forces.
Discussions based on Iran’s 10-point peace proposal are set to commence in Islamabad on Friday, as Trump called the proposal a “workable basis for negotiation.”
The announcement of the ceasefire quelled fears of a drawn-out conflict, thereby lifting market sentiment and encouraging a risk-on approach. As equities rallied globally, the US Dollar (USD) experienced downward pressure, which in turn supported Gold prices. The US Dollar Index (DXY), measuring the Greenback against a basket of major currencies, was down nearly 0.90% at approximately 98.77.
Oil Price Drop Eases Inflationary Pressures
In concert with the rise in Gold prices, oil recorded a sharp decline. WTI crude fell over 10% to around $88.20, alleviating inflation concerns and potentially decreasing the likelihood of tighter monetary policies from major central banks.
This shift in inflation expectations has revitalised Gold’s performance, which had previously been challenged as markets anticipated prolonged higher interest rates, especially from the Federal Reserve (Fed).
Despite these positive dynamics, robust buying momentum for Gold remains elusive, as traders anticipate that the Fed will act cautiously before implementing rate cuts. Recent US Nonfarm Payrolls (NFP) data indicates a stable labour market, while oil prices are still remaining above pre-conflict levels, thus keeping inflation risks in focus. Investors are now eyeing the Fed’s minutes from the March meeting for further insights into monetary policy.
Technical Analysis: XAU/USD Shows Neutral Bias
From a technical perspective, XAU/USD is currently trading between significant Simple Moving Averages (SMAs), resting below the 50-day SMA at $4,928.81 but above the 100-day SMA at $4,667.89. This suggests a broadly neutral bias while the market develops within a range.
The momentum indicators are mildly positive, with the Relative Strength Index (RSI) just above the mid-range and the Moving Average Convergence Divergence (MACD) remaining in positive territory, indicating that buyers maintain a slight advantage even as the price remains capped by upper trend levels.
On the upside, immediate resistance exists at the 50-day SMA level of $4,928.81. A sustained breach of this resistance could pave the way for a more decisive recovery. Conversely, initial support is identified at the 100-day SMA of $4,667.89, where a break below could trigger a deeper corrective phase despite the prevailing constructive momentum.
Upcoming Economic Indicators: FOMC Minutes
Investors should also prepare for the upcoming release of the Federal Open Market Committee (FOMC) minutes, scheduled for April 8, 2026. The FOMC conducts eight meetings yearly to evaluate economic conditions, monetary policy stances, and assess risks to long-term financial goals. The minutes serve as a critical guide for future US interest rate policies.
In summary, the market is experiencing optimistic sentiment following the US-Iran ceasefire, alongside declining oil prices that alleviate inflation worries. Gold prices have reacted positively, though traders remain cautious in their outlook, awaiting more guidance from the Fed and subsequent market developments.
