Key Highlights
- Continuous gold futures advanced 3.8% to reach $4,864.40 per ounce following ceasefire confirmation
- Silver futures jumped 7.9%, while spot prices climbed 6% to $77.38 an ounce
- President Trump revealed a two-week military pause with Iran through his social media platforms
- Crude oil prices plummeted over 15% while the dollar index declined amid reduced tensions
- Prior to the truce, both precious metals faced downward pressure from inflation worries and rate expectations
Precious metals experienced a dramatic surge on Wednesday following President Donald Trump’s announcement of a temporary two-week military standstill with Iran, pausing scheduled U.S. strikes.
Continuous gold futures climbed 3.8% to settle at $4,864.40 per ounce. Spot gold advanced 2.7% to $4,832.51 an ounce, marking its strongest position since March 19.
Silver posted even more impressive gains. Futures contracts surged 7.9%, while spot silver rallied 6% to $77.38 per ounce. Platinum also participated in the rally, advancing 4.2% to $2,044.60 an ounce.
Through his social media channels, Trump declared the U.S. would halt military operations for a two-week period. The president indicated that American forces had already accomplished their primary strategic goals.
The ceasefire declaration arrived just under two hours ahead of an 8:00 p.m. ET cutoff that financial markets had been monitoring anxiously. Throughout the day, Trump had delivered stern warnings regarding potential repercussions for noncompliance.
Pakistan facilitated the truce agreement through eleventh-hour diplomatic negotiations. The terms require Iran to maintain open access through the Strait of Hormuz for commercial shipping.
Approximately 20% of worldwide oil transportation passes through the Strait of Hormuz. Iranian officials indicated conditional acceptance to permit safe vessel passage throughout the ceasefire timeframe.
Trump additionally stated the U.S. would assist in resolving shipping congestion within the Strait.
Market Response to Ceasefire News
Oil prices plunged more than 15% in the wake of the announcement. Risk-sensitive assets rallied while the U.S. Dollar Index declined nearly 1% during Asian market hours on Wednesday.
A softer dollar makes gold more affordable for international buyers holding alternative currencies, which generally provides price support.
Interestingly, both gold and silver had been declining throughout the Iran military confrontation. Elevated energy prices had intensified inflation fears, diminishing market expectations that the Federal Reserve would implement near-term interest rate reductions.
Since precious metals like gold and silver generate no yield, they typically underperform when interest rates are anticipated to remain elevated.
Looking Ahead
Market participants are now focused on Friday’s U.S. Consumer Price Index release for March. The report is anticipated to reveal monthly headline inflation growth, primarily driven by increased fuel expenses.
This economic data could significantly influence Federal Reserve policy expectations for upcoming months.
Among industrial metals, copper futures on the London Metal Exchange rallied 2.8% to $12,691.33 per ton. Copper futures in the United States gained 2.7% to reach $5.74 per pound.
Friday’s inflation report represents the initial major economic indicator reflecting how the recent energy price spike has impacted overall price pressures.
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