The global gold market has staged another strong rebound. A preliminary peace agreement between the United States and Iran has not only triggered a sharp decline in oil prices but has also weakened market expectations for additional Federal Reserve rate hikes this year. The resulting pressure on the U.S. dollar has created fresh opportunities for gold prices to advance.

Over the past two trading sessions, the most significant factor supporting gold has been the prospect of a preliminary agreement between Washington and Tehran aimed at ending tensions in the Middle East. Announced by U.S. President Donald Trump, the deal extends the fragile ceasefire established in April by another 60 days and includes the crucial reopening of the Strait of Hormuz. Since military strikes involving Iran earlier this year, the strategic waterway had effectively remained under Iranian restrictions.

The Strait of Hormuz handles roughly one-fifth of the world’s oil and liquefied natural gas trade, making its reopening highly significant for global energy supply chains.

As details of the agreement emerge, Trump has emphasized that the framework prevents Tehran from obtaining nuclear weapons. In return, Iran would be allowed to resume oil exports and regain access to banking, transportation, and insurance services. The agreement reportedly includes strict conditions, such as the disposal of enriched nuclear materials and guarantees of freedom of navigation through the Strait of Hormuz.

Iran has described the arrangement as an important step toward restoring normal economic activity. Both sides are expected to formally sign the agreement in Switzerland on Friday before launching a new round of negotiations focused on more complex issues, including Iran’s nuclear program. While uncertainty remains surrounding tensions involving Israel and Hezbollah, and a comprehensive final agreement has yet to be achieved, the significant easing of geopolitical risks has already shifted market sentiment.

The prospect of the agreement has triggered a chain reaction across financial markets, including lower short-term interest rate expectations, declining energy prices, and reduced odds of future Federal Reserve rate hikes. Lower energy costs have provided additional support for gold. Rather than relying solely on safe-haven demand, gold's role as an inflation hedge is once again attracting investor attention amid a stabilizing macroeconomic environment.

Market participants are now closely watching this week's Federal Reserve policy meeting, which will be the first chaired by the newly appointed Fed Chair, Kevin Warsh. While markets broadly expect the central bank to keep interest rates unchanged within a 3.50%–3.75% range, investors will be focusing on whether policymakers remove references to a dovish bias and how Warsh communicates the Fed’s policy outlook during his press conference.

Spot gold has now risen for four consecutive trading sessions, suggesting that bullish sentiment is recovering. While optimism surrounding the U.S.-Iran agreement has provided a near-term catalyst for gains, the temporary nature of the deal, ongoing Israel-Hezbollah tensions, and the complexity of future nuclear negotiations indicate that geopolitical risks have not disappeared entirely. Moreover, a full normalization of energy supplies could take several months, while inflationary pressures are unlikely to vanish overnight.

Market Analysis:

On the four-hour chart, gold remains in a consolidation-driven rebound, with MACD lines and histogram bars converging above the zero line.

Going forward, communication from the Federal Reserve’s new leadership and any changes in policy guidance will likely become the primary drivers of market volatility. If Warsh adopts a cautious, data-dependent stance, gold’s safe-haven premium could remain intact and support further gains. Conversely, a more hawkish tone may trigger short-term downside pressure and profit-taking in the precious metal.