Gold and Silver Up on US-Iran Peace Deal

 

Gold and Silver Up on US-Iran Peace Deal

(Bullion News Network) – Gold and silver prices jumped on Monday after U.S. and Iranian leaders confirmed that a peace agreement had been signed. The spot price of gold gained more than $90 per troy ounce, crossing the $4,300 line days after logging one of its lowest prices in months. Silver once again outpaced gold, adding over $2 per troy ounce and gaining a bit of traction above the $70/ozt level during its third consecutive day in the green. The gold-silver ratio retreated for a fourth consecutive day on Monday, shedding less than 1%.

Over the weekend, U.S. President Donald Trump announced that a peace deal had been reached with Iran. The comments were confirmed by Iranian state media and Pakistani negotiators, who said that a preliminary deal had been reached. On Monday, sources confirmed that Trump, Vice President JD Vance, and Iranian Parliament Speaker Mohammad Bagher Ghalibaf signed the agreement virtually.

The exact details of the deal were not made public as of Monday, but the agreement is expected to reopen the Strait of Hormuz and end the American blockade of Iran’s ports. Certain issues, including Iran’s nuclear program, will be scheduled at a later date following a signing ceremony.

According to Trump in a Truth Social post, the Strait of Hormuz was reopened on Monday.

Ships are starting to move, many loaded up with Oil, out of the Strait of Hormuz. They are going along the Southern “Highway,” which is totally safe, secure, and pristine. There are other areas of travel, also!!!

Crude oil futures fell following the announcements. Month-to-date, oil futures were down by more than 25%, as of market close on Monday. On a longer timeline, the price of crude oil is still considerably higher than when the year began; futures year-to-date remained up nearly 31% Monday afternoon.

Analysts warn that the several factors could imperil the new agreement, though. Most notably, Iranian leaders have repeatedly warned that Israel’s war in Lebanon would break the terms of previous peace agreements. Israeli strikes on Iran-backed Hezbollah reportedly eased on Monday, but large-scale fighting could complicate the final phase of negotiations between the U.S. and Tehran.

U.S. markets soared on Monday, with the Dow setting a new record after climbing by more than 450 points. American markets were boosted on Monday by the peace deal announcement, as well as falling crude oil prices and another tech rally.

Although developments in this phase of peace talks will dominate headlines throughout the week, traders are also looking toward the upcoming Fed meeting for more cues on where the economy – and interest rates – could be heading. The Federal Open Market Committee (FOMC) is widely expected to leave the federal funds rate unchanged during its meeting on Wednesday, but investors speculate that a rate hike could be coming this year.

CME FedWatch projects a 7.4% probability that the FOMC will vote to raise the federal interest rate by 25 basis points in July, with a 1.4% chance of a rate cut. By December, analysts expect more than a 50% likelihood that the target federal funds rate will close the year higher than the current rate (3.5-3.75%).

Why is an interest rate hike possible this year? Some analysts believe that the FOMC will raise interest rates in an effort to curb inflation. Inflation rates have continued to rise throughout 2026, while the labor market showed surprising strength in the most recent two U.S. employment reports. Because of a strong labor economy and rising consumer prices, the FOMC might consider raising rates in order to mitigate inflation.

Fed chair Kevin Warsh, Trump’s pick to succeed Jerome Powell, will lead Wednesday’s meeting for the first time in his new position. Warsh has been an outspoken supporter of the White House, but it is unclear whether the economist will push to cut interest rates, a longstanding priority of Trump’s. Throughout 2025 and early 2026, the president repeatedly criticized Powell for refusing to cut interest rates.

Warsh also inherits a historically divided Federal Reserve. The FOMC’s April meeting saw four dissents, the highest number of dissenting voters since 1992. Needless to say, traders can expect a bit of drama out of the central bank throughout the rest of 2026.

While the FOMC is very likely to leave interest rates unchanged, economists will pay close attention to Warsh’s post-meeting press conference on Wednesday. Whether Warsh will give investors more “hints” than Powell regarding where interest rates are heading is unclear, but these press conferences have historically impacted real-time market movements.

With a resolution of the US-Iran war in sight, interest rate speculation could emerge once again as a major demand driver for precious metals.