Spot Gold Reclaims $4,700 Mark. US and Iran Completely Declare End of War?

TradingKey - During Wednesday's trading session, spot gold once again reclaimed the $4,700 psychological level, with intraday gains extending to 3.19%. Previously, significant signals from the U.S. indicated that a ceasefire agreement with Iran was close, leading to a cooling of market risk aversion and a weakening of the U.S. dollar, which triggered a strong rally in precious metal assets such as gold.

[Gold prices reclaim the $4,700 mark; Source: Google Finance]

The latest report from Axios indicates that two U.S. officials and people familiar with the matter revealed the White House believes it is close to reaching a deal with Iran on a one-page memorandum of understanding to end the war and establish a framework for subsequent, more detailed nuclear negotiations.

According to parts of the agreement, Iran will commit to suspending uranium enrichment activities, while the U.S. agrees to lift sanctions on Iran and release billions of dollars in frozen Iranian funds; both sides will also remove restrictions regarding transit through the Strait of Hormuz.

Under the current version, the memorandum will announce the end of the regional war and initiate a 30-day negotiation period. The U.S. expects to receive a response from Iran on several key issues within the next 48 hours.

Driven by expectations of geopolitical de-escalation, international crude oil prices remained under pressure, with WTI crude futures falling to nearly $95 per barrel intraday and Brent crude dropping by more than 6% simultaneously.

"The retreat in oil prices is itself a positive for gold," noted Kelvin Wong, Senior Market Analyst at OANDA. "The previous mechanism was that high oil prices pushed up inflation expectations, which in turn raised the probability of Fed rate hikes and suppressed gold's valuation. This link is now being broken."

Meanwhile, U.S. Secretary of Defense Hegseth confirmed that the ceasefire "is indeed effective now," while Secretary of State Rubio explicitly stated that the offensive phase of military operations against Iran has "ended." Trump stated Tuesday night that the move to reopen the Strait of Hormuz would be paused for a short period to observe the progress of the agreement.

At the same time, Goldman Sachs maintains its gold price target of $5,400 per ounce by the end of 2026, supported by central bank gold purchases, normalization of speculative positioning, and expectations of future Fed rate cuts.

Market attention is shifting toward the U.S. non-farm payroll report to be released later this week, which will serve as a crucial guide for the Federal Reserve's future interest rate path.