The US and Iran reached a historic peace agreement over the weekend, leading to the reopening of the Strait of Hormuz. This development caused international oil prices to drop by over 5%, easing inflation fears and reducing expectations for a Federal Reserve rate hike. Consequently, the US dollar weakened, and gold prices opened significantly higher. The upcoming Federal Reserve FOMC meeting this week is undoubtedly the most critical event. The first press conference by the new Chairman, Kevin Wash, will be a focal point for all traders.
On Monday, June 15th, it was announced that a formal peace agreement had been reached with Iran. The Prime Minister of Pakistan confirmed on the 15th that both sides agreed to an immediate and permanent cessation of military actions on all fronts, with a signing ceremony scheduled for June 19th in Switzerland. Many gold investors might question: with an agreement in place and war risks receding, shouldn't gold's safe-haven premium disappear? Why then did gold prices surge instead? The answer to this question is key to understanding the current market logic. The previous logic chain was: War → Oil prices rise → Inflation expectations increase → Fear of Fed rate hikes → Gold falls. The new logic is: Peace → Oil prices retreat → Inflation expectations cool → Reduced necessity for rate hikes → Gold rises.
The market widely expects the Federal Reserve to keep its interest rate unchanged at 3.50%-3.75% this Wednesday, June 18th (Beijing time), with a probability exceeding 98%. However, this will be the first FOMC meeting under new Chairman Kevin Wash. The key focus will be whether the dot plot removes any hinting language suggesting "possible future rate cuts." A hawkish tone from Chairman Wash (emphasizing higher rates for longer or discussing hikes) would be bearish for gold, potentially erasing recent gains. A more dovish or status-quo stance from Wash could allow gold to stabilize or even test higher levels.
From a technical perspective, gold opened with a gap up at the start of the week, leaving a gap near the 4270-40 area. The initial part of the week will be crucial to see if this gap gets filled. If it is filled without breaking lower, the short-term technical trend for gold would be relatively strong, potentially sustaining its rebound and making the impact of the Fed's rate decision seem limited. Initial resistance above is seen around 4315, which is near the 10-day moving average and the 200-hour moving average, both posing potential selling pressure. If the gap is filled early in the week, a test of this resistance level is highly likely. If the price remains strong and breaks above 4315, the next short-term resistance to watch would be the dense area of previous highs and lows around 4350/60. A further break above that would shift focus to resistance near 4420.
Essential Strategy for the Week
In summary, the new Fed Chairman's debut this Wednesday is the biggest short-term risk event. It is advisable to avoid chasing the rally and to control position sizes ahead of the meeting, anticipating range-bound trading. If the Asian and European sessions see a direct surge to the 4370-4350 area today without sustained strength, it could trigger short-term profit-taking. It's better to miss a move than to chase at highs. Furthermore, although the agreement has been reached, the formal signing is not until the 19th. Any further "small actions" by Israel during this period could cause market volatility. Keep positions light, and only add gradually once the direction is confirmed.
Trading Recommendations for Today
Gold: Operate within the 4260-4360 range. Set a stop loss of 10 USD and a take profit target of 70-80 USD.
Key Economic Data and Events to Watch Today: Monday, June 15, 2026
TBD G7 Summit Opening
20:30 Canada April Wholesale Sales Month-over-Month
20:30 US June New York Fed Manufacturing Index
21:15 US May Industrial Production Month-over-Month
22:00 US June NAHB Housing Market Index
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