US-Iran Deal Boosts Gold and Silver
Gold and silver prices rose sharply on Monday (June 15) after the United States and Iran announced a temporary agreement to end the conflict and reopen the Strait of Hormuz. This sentiment eased global inflation concerns, pressured the US dollar, and reduced expectations of interest rate hikes that had previously weighed on precious metals.
Bullion briefly surged as much as 3% to US$4,345/oz, while silver rose 4.1%. At 9:53 a.m. London time, spot gold rose 2.8% to US$4,338.53/oz, with silver rising 3.7%. Platinum and palladium also moved positively, while the Bloomberg Dollar Spot Index fell 0.2%.
The main catalyst came from President Donald Trump's statement that the US would allow the reopening of the Strait of Hormuz and an end to the blockade on Iran. Iran's Deputy Foreign Minister also confirmed that an agreement had been reached. Within this framework, the US and Iran agreed to refrain from attacking each other, opened a 60-day negotiation period regarding Iran's nuclear program, and provided room for sanctions relief on Iranian oil sales abroad.
For gold, the fundamental transmission is quite strong. Since the war began in late February, gold has moved largely inversely to oil as rising crude prices fueled inflation risks and reinforced expectations of high interest rates. When oil prices fell after the US-Iran deal, the market began to assess that energy inflation pressures could ease. This supported gold because precious metals tend to be sensitive to the dollar and interest rate expectations.
Gold's rise also boosted precious metal mining stocks. Northern Star Resources rose around 8% in Sydney, Zijin Mining rallied around 7% in Hong Kong, while Barrick Mining and Newmont rose more than 4% in North American pre-market trading.
However, the market is still awaiting certainty about implementation. The new agreement will be tested through the signing, the physical opening of Hormuz, and the direction of the Iran nuclear negotiations. The next focus will be oil prices, the US dollar, Fed interest rate expectations, and this week's central bank decision. (Arl)
Source: Newsmaker.id
