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Spot gold climbs 2% to $4,304.11 an ounce by 0122 GMT, its highest level since June 9; US gold futures for August delivery also gain 2% to $4,325.20 per ounce.
Gold Prices Today, June 15.
Gold prices rose 2% on Monday after US and Iranian officials announced a preliminary framework agreement to end their conflict, a development that pushed oil prices lower, weakened the US dollar and eased concerns over inflation and higher interest rates.
In the international market, spot gold climbed 2% to $4,304.11 an ounce by 0122 GMT, its highest level since June 9, according to Reuters. US gold futures for August delivery also gained 2% to $4,325.20 per ounce.
The rally came after US and Iranian officials said on Sunday that they had agreed on a framework to end the war, lift the US blockade on Iran and reopen the strategically important Strait of Hormuz. Pakistani Prime Minister Shehbaz Sharif said in a post on X that the agreement is scheduled to be formally signed in Switzerland on Friday.
The US dollar fell to its lowest level in 10 days, making dollar-denominated gold cheaper for holders of other currencies. Meanwhile, oil prices dropped more than 4% as the prospect of renewed energy flows through the Strait of Hormuz reduced supply concerns.
“Lower oil prices and a softer dollar, stemming from reduced geopolitical risk and the anticipated reopening of the Strait of Hormuz, are helping to calm inflation expectations,” Tim Waterer, Chief Market Analyst at KCM Trade, told Reuters.
“This combination is providing the precious metal with its best tailwind in recent weeks, though sustainability will depend on how durable the peace agreement proves to be,” he added.
Gold has declined around 20% since the beginning of the US-Israeli conflict with Iran in late February. During the crisis, disruptions linked to the Strait of Hormuz had driven oil prices sharply higher, fuelling inflation worries and reinforcing expectations that interest rates could remain elevated for longer.
While gold is traditionally viewed as a hedge against inflation, higher interest rates tend to reduce its attractiveness because the metal does not offer any yield.
According to the CME FedWatch Tool, markets have lowered expectations of a US interest rate hike in December to 47% following the peace framework, compared with 69% a week earlier.
Analysts at OCBC said that despite the easing of immediate geopolitical risks, longer-term drivers remain supportive for gold.
“Currency debasement concerns, fiscal risks and ongoing geopolitical fragmentation continue to underpin long-term demand,” the bank said in a note, adding that softer energy-driven inflation could allow these themes to regain investor focus.
Other precious metals also advanced. Spot silver gained 3.1% to $70.07 per ounce, platinum rose 3.1% to $1,771.27, while palladium climbed 3.3% to $1,325.76.
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Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalis…Read More
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