Gold Price Jumps as Iran Deal Talks Heat Up — But Analysts Say Don’t Get Excited Yet

TLDR

• Gold rose over 1% on Monday as US-Iran peace deal hopes grew
• President Trump said a framework deal was “largely negotiated”
• A potential deal could reopen the Strait of Hormuz and ease energy-driven inflation
• The dollar and Treasury yields fell, boosting gold prices
• Gold is still down about 13% since the Iran conflict began in late February

Gold prices climbed sharply on Monday as progress in US-Iran peace talks lifted investor sentiment and pushed the dollar lower.

Spot gold rose 1.2% to $4,561.41 an ounce in London trading. Gold futures gained 0.8% to $4,593.34 an ounce. Silver jumped 3.1% to $77.86, while platinum and palladium also moved higher.

The gains came after US President Donald Trump said over the weekend that a peace deal framework with Iran was “largely negotiated.” He added he would not “rush” into any agreement.

US Secretary of State Marco Rubio said the US and Iran had a “pretty solid” framework deal to reopen the Strait of Hormuz. He said Washington was waiting on Tehran’s response.

Rubio also warned of renewed military action if Iran rejected the deal. A US naval blockade of Iran remains in place until an agreement is signed.

Reports showed the two sides still at odds over Iran’s nuclear program. Iranian officials have largely rejected US demands to hand over enriched uranium stockpiles.

Why Traders Are Watching the Hormuz Deal

The Strait of Hormuz is a key shipping lane for global oil supply. Reopening it could ease energy prices, which have been a major driver of inflation since the conflict began in late February.

Higher inflation has pushed traders to bet on interest rate hikes. Money markets are pricing in a near-certain Federal Reserve rate increase by December.

Gold does not pay interest, so higher rates tend to weigh on the metal. Gold has fallen around 13% since the Iran conflict started, partly because of those rate expectations.

On Monday, both the dollar and Treasury yields retreated on peace deal hopes, giving gold room to recover.

Market Reaction Remains Cautious

Analysts noted that the gold rebound was still “relatively muted.” Justin Lin of Global X ETFs in Sydney said markets have seen Trump announcements fail to materialize before and want concrete evidence before pushing prices higher.

Christopher Wong of Oversea-Chinese Banking Corp said there may be reluctance to chase the rally while key details around Iran’s nuclear program remain unresolved.

Wong also noted that markets in the US, UK, Hong Kong, and South Korea were closed for holidays on Monday, leading to thinner trading volumes.

New Federal Reserve Chair Kevin Warsh recently took over the role. Investors are watching for his signals on the economy and rate policy.

The Bloomberg Dollar Spot Index fell 0.2% on Monday. Spot silver was up 2.9%, and spot platinum gained 2% to $1,968.12 an ounce.

Gold remains well below its earlier highs. The path forward depends heavily on whether a final Iran deal is reached and what it means for energy prices and inflation.

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