On April 10, ATFX reported that gold prices held relatively steady in morning trading as investors prepared for U.S.-Iran ceasefire negotiations scheduled to take place in Pakistan over the weekend. However, gold remained on track for a third consecutive weekly gain. Oil prices saw a slight rebound after a recent decline, while most Asian stock markets advanced. Earlier, U.S. President Donald Trump expressed optimism about reaching a deal with Iran but later threatened Tehran, demanding it stop imposing tolls in the Strait of Hormuz. Since the ceasefire was announced, overall market sentiment has improved, with the S&P 500 posting its longest winning streak since October on Thursday.
Traders are closely monitoring the fragile ceasefire and the planned U.S.-Iran talks in Islamabad on Saturday for clues on future market direction. Although oil prices are facing their largest weekly drop in over nine months and global equities are poised for a second straight week of gains, the sustainability of these trends hinges on market confidence in the durability of the ceasefire and the uninterrupted passage of oil through the Strait of Hormuz.
The U.S.-Iran talks are expected to begin under fragile conditions. First, there is a fundamental divergence in what "open" means for the Strait of Hormuz. The U.S. insists on "full, immediate, and secure" access without restrictions or delays. In contrast, Iran’s foreign minister stated that safe passage is "achievable" but must be "coordinated with Iranian armed forces" and account for technical constraints. Iran’s Supreme National Security Council was more direct, asserting that Iran must retain control over the strait. The gap between "coordinated passage" and "freedom of navigation" reflects more than just wording—it highlights an unavoidable clash over basic implementation standards even before negotiations formally begin.
Second, the two sides remain at odds over whether Lebanon should be included in the talks. Before a ceasefire agreement has been finalized, tensions over Lebanon have already escalated. On the 8th, Israel launched its largest airstrike since the conflict began, killing at least 254 people and injuring over a thousand. Iran’s parliament speaker publicly accused the U.S. and Israel of violating three key terms of Iran’s ten-point ceasefire proposal—ceasing hostilities in Lebanon, halting violations of Iranian airspace, and accepting Iran’s uranium enrichment activities. Iran further warned that if Israeli attacks continue, the decision to reopen the Strait of Hormuz could be reversed.
Third, the starting positions of both sides remain entirely opposed. A White House spokesperson stated clearly that President Trump’s "red line" demanding Iran halt uranium enrichment remains unchanged, that surrendering enriched uranium is a top priority, that Lebanon is not part of the ceasefire agreement, and that U.S. troops will remain on standby without immediate withdrawal. Meanwhile, Iran’s Supreme National Security Council claimed that the U.S. has "in principle" accepted Iran’s core demands—including Iranian control of the Strait of Hormuz, acceptance of uranium enrichment, sanctions relief, and an end to hostilities including those in Lebanon. From Gaza to Beirut, from uranium enrichment to strait jurisdiction, U.S. and Iranian narratives show almost no overlap. U.S. Secretary of State Vance described the current situation as a "fragile ceasefire" and warned that if Iran does not negotiate in good faith, the U.S. will reinstate military and economic pressure. In a sense, this is the most candid U.S. assessment of the talks’ prospects.
Following news of the ceasefire, Brent crude futures plunged over 16%, quickly falling below $100 per barrel, while WTI crude dropped below $95. This morning’s modest rebound in oil prices reflects market ambivalence—hopeful for peace but aware that it remains distant. Several European financial institutions jointly noted that while the ceasefire temporarily avoids the "worst-case scenario," damage to energy infrastructure and the ultimate direction of the conflict remain uncertain. Even under optimistic assumptions, repairing infrastructure and restoring production could take weeks or months. If strait transit is disrupted again, energy prices could rebound rapidly. Société Générale projected that if the ceasefire holds and tensions ease, oil could find a floor around $85 per barrel by year-end. However, if countries begin stockpiling oil for energy security reasons, prices could climb further.
Gold experienced sharp volatility after the ceasefire announcement—spot gold surged over 3% at one point, reaching a high of $4,856.93 per ounce, but the rally slowed as news emerged of Israeli airstrikes in Lebanon and Iran’s renewed threat to close the strait. As previously noted, gold’s current pricing logic reflects a transition from safe-haven demand to expectations of interest rate cuts.
The ceasefire-driven drop in oil prices has significantly eased concerns about worsening inflation. After the ceasefire, market expectations for at least one Fed rate cut by year-end climbed to 65%, a stark contrast to pre-ceasefire sentiment, which had ruled out cuts and even priced in rate hikes. This renewed expectation of monetary easing reduces the opportunity cost of holding gold, providing a new supportive dynamic for its price.
Later today, the U.S. will release CPI data for March. Headline annual CPI is expected to rebound sharply from 2.4% in February to 3.3% or higher, with the monthly rate potentially hitting 0.9%—the largest increase since June 2022. If CPI meets or slightly undershoots expectations, confirming the disinflationary effect of lower oil prices, rate-cut expectations would strengthen, supporting gold. If CPI significantly exceeds expectations—for instance, with an annual rate above 3.5%—the inflationary impact of oil prices may prove more persistent than anticipated, dampening rate-cut expectations and temporarily pressuring gold. However, ongoing geopolitical uncertainty would likely provide a floor, leading to an initial dip followed by consolidation.
Over the next two weeks, global capital will engage in a three-front battle: diplomatic maneuvering in U.S.-Iran negotiations, inflation data’s influence on the Fed’s policy path, and the actual progress of strait transit restoration. During the talks, market volatility is expected to intensify. For oil, focus on real-time developments in negotiations; for gold, monitor shifts in rate-cut expectations, with geopolitical risks remaining a short-term catalyst.
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