Gold prices climbed during yesterday's trading to their highest level in about a week, supported by geopolitical developments following the announcement of a preliminary agreement between the United States and Iran to halt the war and reopen the Strait of Hormuz — a move that heightened volatility in global markets and reshaped expectations for interest rates and inflation.
Spot gold rose by about 3%, reaching $4,344.77 per ounce, the highest level since 9 June, while US gold futures gained by the same margin to reach $4,366.80 per ounce.
Gold's advance was also supported by a 0.2% decline in the US dollar index, which increased the appeal of dollar-denominated precious metals to investors around the world.
Analysts believe that the easing of geopolitical pressures resulting from the agreement contributed to lowering inflation expectations, and consequently reduced the likelihood of monetary policy tightening — a factor that boosted demand for gold as a safe haven.
The rally was not confined to gold alone, as other precious metals also posted strong gains, reflecting a broad wave of buying across metals markets driven by the weaker dollar and falling bond yields.
In a notable development, Singapore announced plans to establish an over-the-counter gold settlement system, alongside the introduction of gold storage services in the central bank's vaults, in a move aimed at strengthening its position as a global hub for precious metals trading.
Analysts say current gold movements reflect the interplay of two key factors: a geopolitical de-escalation that reduces systemic risks, and a shift in US interest rate expectations that affects the opportunity cost of holding gold.
Experts stress that gold's near-term trajectory will remain directly tied to signals from the Federal Reserve at its upcoming meeting, as well as the degree to which the Washington–Tehran agreement holds in the period ahead.
Gold: +3%
Silver: +4.6%
Platinum: +4.6%
Palladium: +5.1%