Market attention is now shifting to Fed Chair Kevin Warsh’s first policy meeting. Gold is transitioning from a trade driven by war-related risk premiums to one supported by a more favorable interest-rate environment. The move not only marks a strong rebound from recent volatility, but also reflects a profound reassessment of inflation risks and interest-rate expectations following the US-Iran ceasefire agreement.

For a long time, tensions in the Middle East have remained a persistent source of uncertainty for global markets. The Strait of Hormuz, through which roughly 20% of the world’s oil and liquefied natural gas shipments pass, has been effectively disrupted for more than three months. The resulting loss of millions of barrels of oil supply pushed energy prices higher and contributed to broader inflationary pressures.

However, recent statements from US President Donald Trump and Iranian officials have dramatically altered the market narrative.

Although US officials have offered slightly different assessments from Trump’s remarks—for example, suggesting that a full return to normal shipping operations through the Strait could take more than two weeks—the signal of peace has been sufficiently strong.

The announcement has directly eased concerns about a worsening energy crisis and triggered a sharp decline in oil prices.

Gold’s rally has not been driven by the continuation of geopolitical conflict. On the contrary, it is the prospect of peace that has generated a powerful chain reaction.

The gold market is increasingly moving beyond the conflict and beginning to remove its impact from asset prices.

The peace agreement has pushed down US Treasury yields, weakened the US dollar, and lowered oil prices—three of the most important sources of inflation risk and cross-asset uncertainty in recent months.

According to the CME FedWatch Tool, the probability of a Federal Reserve rate hike in December has fallen from nearly 70% last week to around 58%.

This easing in rate expectations has become the primary catalyst behind gold’s latest advance.

As a non-yielding asset, gold typically faces pressure in a high-interest-rate environment. When expectations for future rate hikes begin to fade, the opportunity cost of holding gold declines, significantly improving its appeal.

Market attention has now shifted toward this week’s Federal Reserve meeting.

This will be the first policy meeting chaired by Kevin Warsh since assuming leadership of the central bank.

Markets broadly expect the Fed to leave rates unchanged within the current 3.50%–3.75% range. However, the tone of the policy statement and Warsh’s comments during the press conference will be closely scrutinized for clues regarding the future policy path.

Despite the current optimism, the implementation of the peace agreement remains far from guaranteed.

Israel has reacted strongly to the development. Prime Minister Benjamin Netanyahu is reportedly seeking a meeting with Trump, while Israel’s Defense Minister has explicitly stated that Israeli forces will not withdraw from southern Lebanon, creating potential challenges for the ceasefire arrangement.

Market Analysis:

Gold is currently consolidating on the 4-hour chart, with both the MACD lines and histogram continuing to expand above the zero line.

Overall, the US-Iran ceasefire agreement has delivered a significant relief effect across global markets.

Gold is gradually moving away from a conflict-premium narrative and toward a framework driven by expectations of a more accommodative interest-rate environment.

For now, gold remains in a high-level consolidation phase as investors await both the Federal Reserve’s policy decision and further confirmation of the peace agreement.

If Warsh adopts a dovish tone or the agreement proceeds smoothly, gold could continue pushing higher.

Conversely, if geopolitical tensions re-emerge or the Federal Reserve unexpectedly adopts a more hawkish stance, gold could face renewed downside pressure.