A sudden shift in gold prices has been driven by a combination of macroeconomic factors amid de-escalating tensions between the United States and Iran. The signing of a preliminary memorandum of understanding triggered a chain reaction across financial markets.
Growing expectations that the Suez Canal will soon reopen—and jitters surrounding the Strait of Hormuz are about to fade—have weighed heavily on energy costs, sending Brent crude below $94 per barrel. This decline brought a sigh of relief to investors, pushing long-term inflation concerns to the back burner.
Reduced stagnation risks mean the Federal Reserve (Fed) can afford to be less hawkish. As a result, 10-year Treasury yields (US10Y) dropped by 10 basis points, falling from a nine-month high to 4.35%.
Such a turn of events made American bonds a slightly less appealing investment option, bringing traders’ focus back to gold. The Dollar Index (DXY) has just lost over 0.7%, sliding below pre-crisis levels near 98.00. Since the precious metal is denominated in USD, a weaker greenback automatically makes bullion more affordable for holders of other currencies.
With no extreme inflationary pressures on the horizon, market expectations of Fed rate cuts in 2026 are now rising from the ashes. This is a strong, long-term fundamental tailwind for the precious metal.
The overall recommendation is to buy gold. Profits should be taken at the level of $4,880. Stop Loss could be set at $4,600.
The volume of the open position should be calculated so that the potential loss (protected by a Stop Loss order) does not exceed 1% of your deposit. If your account balance does not allow opening a position of this size, it is better to avoid entering the market on this signal and wait for other trade options that meet low-risk criteria.
This content is for informational purposes only and is not intended to be investing advice.
