Gold stocks surged higher today as the U.S. and Iran stepped back from the brink and agreed to a two- week ceasefire in the Middle East.
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An agreement between the two warring nations, including opening the Strait of Hormuz, was sealed just minutes before President Trump’s deadline. Without a deal Trump had threatened to end Iranian “civilization” with Iran also vowing to step up its attacks in the Gulf region and potentially beyond.
Spot Gold Higher
The deal saw oil prices drop, easing one of the biggest downside pressures on the gold price in recent weeks. A higher oil price means higher inflation and higher interest rates in response. Gold prices tend to fare better in times of lower interest rates.
The spot gold price, which is down nearly 10% over the last month, was up 1.71% at $4,783 in early trading.
However, the VanEck GoldMiners ETF (GDX) performed better soaring 6.24% in pre-market trading. Key stock Agnico Eagle Mines (AEM) was up 5.07%, with Newmont Mining (NEM) up 5.71%.
Gold and metal miners don’t just benefit from a higher gold price. A lower oil price should also help stimulate economic investment and thus more demand for their products.
Whether the gold price retraces its steps back to $5,000 depends on whether investors see the two-week pause as a path forward to an overall peace or merely a can being kicked down the road for hostilities to resume later this month.
Analysts Remain Cautious
“Gold’s push reflects a recalibration of risk, rather than a full regime shift,” said Ahmad Assiri, a strategist at Pepperstone Group Ltd. “The move higher suggests markets are now pricing in a lower probability of prolonged disruption, while still retaining a meaningful discount versus the pre-Iran setup.”
Dan Coatsworth, head of markets at AJ Bell, also cautioned that inflation may still remain high in the weeks ahead. “Make no mistake – this is a pause in the proceedings and not a full resolution. That means any market rebound could quickly lose momentum unless there is clear progress with US and Iran talks,” he said. “A lower oil price means the foot has been taken off the inflation pedal somewhat, but it doesn’t mean that inflation is no longer a problem. The energy spike has gone on long enough to suggest more price hikes are coming on everyday items.”
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