Significant news has emerged from the Middle East this morning.
Former U.S. President Donald Trump stated on social media that the agreement between the United States and Iran is "now complete," the Strait of Hormuz is fully open, and the U.S. Navy has immediately lifted the relevant blockade.
Pakistan's Prime Minister Shehbaz Sharif posted on a social media platform, announcing that a peace agreement between the U.S. and Iran has been reached following intensive negotiations. He stated that both sides have declared an immediate and permanent cessation of military actions on all fronts, including within Lebanon. The official signing ceremony is scheduled for June 19 in Switzerland.
Sharif expressed gratitude to the U.S. and Iran for their commitment to resolving the conflict through diplomacy. He also extended thanks to Qatar for its support in the mediation efforts and acknowledged the significant contributions from the leadership of Saudi Arabia and Turkey. The post mentioned that mediators would facilitate a series of meetings this week to lay the groundwork for technical negotiations and the formal signing ceremony.
Iranian Deputy Foreign Minister Gharibabadi confirmed that the text of the Iran-U.S. memorandum of understanding has been finalized, with the formal signing of the "Islamabad Memorandum" set for the 19th in Switzerland.
U.S. Vice President Vance stated that he plans to attend the U.S.-Iran agreement signing ceremony in Switzerland this Friday, and that President Trump "may possibly" attend.
Influenced by these developments, international precious metals have risen. Spot gold increased by 1.69% to $4,288.13 per ounce, and spot silver rose by 2.72% to $69.81 per ounce.
WTI crude oil futures prices fell by 4.62% to $80.96 per barrel.
Precious Metals Stage a "V-Shaped" Reversal
Last week, the precious metals market experienced a sharp "fall and rise" pattern. After international gold prices declined consecutively, market sentiment quickly reversed, pushing gold back above the $4,200 per ounce level, with silver prices also rising. Analysts believe the shift in geopolitical winds and adjustments in monetary policy expectations were the core drivers of this reversal.
The most immediate catalyst for the strong rebound in precious metals prices was the unexpected easing of Middle East tensions. According to Xiao Jingyu, a precious metals researcher at Xinhu Futures, a "dramatic reversal" in former President Trump's policy stance occurred on the evening of June 11, when he announced the cancellation of plans to strike Iran and stated the U.S.-Iran agreement was largely finalized. Concurrently, the UAE and Iran held their first talks since the conflict erupted, further signaling a de-escalation of regional tensions. The fading of geopolitical risk quickly transmitted to commodity markets, with overnight crude oil prices plunging 6% to below $90 per barrel, U.S. Treasury yields subsequently falling, and precious metals finding strong support.
Xia Yingying, head of the precious metals and new energy research group at Nanhua Futures, stated that signals from Trump regarding an imminent U.S.-Iran peace deal directly pushed oil prices lower, thereby alleviating market concerns about interest rate hikes. This led to declines in both the U.S. dollar and Treasury yields, resulting in significant gains for gold and silver prices.
However, market optimism should be approached with caution. Xia Yingying noted that despite positive signals from the U.S., the Iranian Foreign Ministry later stated that a final conclusion on the Iran-U.S. agreement had not yet been reached. Xiao Jingyu also believes that the strong performance of precious metals last Friday evening had already, to some extent, priced in expectations of the agreement's completion. If the actual implementation of the agreement falls short of market expectations, precious metals could face renewed downward pressure amid weakening sentiment.
Shifts in Federal Reserve monetary policy expectations provided another layer of support for precious metals. The U.S. May inflation data released last Wednesday showed that while the CPI year-on-year figure returned above 4%, the main driver was the energy component. "Considering that oil prices are more inclined to consolidate at high levels rather than re-accelerate upward, the secondary effects of energy prices on overall inflation transmission are limited. This inflation report to some extent eased the urgency for the Fed to raise rates in the near term, providing data support for its core leadership's current policy stance of 'maintaining interest rates unchanged indefinitely,'" Xiao Jingyu told reporters. Additionally, the European Central Bank raised interest rates by 25 basis points on the evening of June 11, its first hike in nearly three years. The strengthening euro put pressure on the U.S. dollar, which also supported gold from a valuation perspective.
Interviewees believe that from a medium-to-long-term perspective, the core logic of the precious metals market will not be shaken by short-term geopolitical easing. Xiao Jingyu stated that structural supportive factors such as rising global sovereign credit risk, geopolitical polarization, and the deepening of de-dollarization remain solid. The U.S.-Israel-Iran conflict has not only increased U.S. fiscal pressure but also damaged the interests of its traditional allies, further accelerating the widening of fissures in the old international order.
Xia Yingying also believes that if elevated oil prices persist, "stagflation trading" could become an important logic driving precious metals prices higher in the next phase. Once signals of slowing economic growth are further confirmed, they would provide strong support for medium-term gold prices.
In the short term, the market still faces multiple uncertainties. Xiao Jingyu stated that whether the U.S.-Iran agreement is ultimately signed and the status of Strait of Hormuz transit will be key variables affecting precious metals at the start of this week. Simultaneously, global markets will usher in a "super central bank week," with policy meetings scheduled for the central banks of Japan, the U.S., the U.K., and others. Among these, the "debut" performance of Fed Chair Wash and potential continued rate hike moves by the Bank of Japan will both impact precious metals trends.
"We believe that in June, the precious metals market may still be pressured by factors such as fluctuations in the Middle East situation, strong capital diversion to the AI sector, and liquidity being drawn away by the SpaceX new stock listing. Overall, it is likely to experience wide fluctuations," Xia Yingying stated.
Overall, the interviewees indicated that the short-term focus of the precious metals market lies in marginal changes in geopolitical sentiment and monetary policy expectations, while the logic for a strategic long-term bullish view remains firm. For investors, pullbacks can still be viewed as opportunities for phased positioning. However, vigilance is required against potential headwinds from renewed Middle East tensions, a resurgence in Fed rate hike expectations, and liquidity risks.
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