Spot Gold Retakes $4,700 Level. Have the U.S. and Iran Completely Declared the End of War?

TradingKey - During Wednesday's trading session, spot gold once again surpassed the $4,700 psychological level, with intraday gains widening to 3.19%. This followed significant signals from the U.S. indicating that a ceasefire agreement with Iran is nearing completion. As safe-haven sentiment cooled and the U.S. dollar weakened under pressure, precious metal assets including gold staged a strong rally.

[Gold prices once again cross the $4,700 mark; Source: Google Finance]

A recent report from Axios indicates that, according to two U.S. officials and sources familiar with the matter, the White House believes it is close to reaching an agreement with Iran on a one-page memorandum of understanding to end the war and establish a framework for subsequent, more detailed nuclear negotiations.

According to portions of the agreement, Iran would commit to suspending uranium enrichment activities, while the U.S. would agree to lift sanctions on Iran and release billions of dollars in frozen Iranian funds. Both sides would also remove restrictions surrounding passage through the Strait of Hormuz.

Under the current version, the memorandum would announce an end to the regional war and initiate a 30-day negotiation period. The U.S. expects to receive a response from Iran on several key issues within the next 48 hours.

Influenced by expectations of geopolitical de-escalation, international crude oil prices remained under pressure, with WTI crude futures briefly dropping to nearly $95 per barrel during the session, while Brent crude simultaneously fell by more than 6%.

"The pullback in oil prices is itself a positive for gold," noted Kelvin Wong, Senior Market Analyst at OANDA. "Previously, the mechanism was that high oil prices pushed up inflation expectations, which in turn increased the probability of Fed rate hikes and suppressed gold valuations. That chain is now being broken."

Meanwhile, U.S. Secretary of Defense Hegseth confirmed that the ceasefire is "indeed effective at this time," and Secretary of State Rubio explicitly stated that the offensive phase of military operations against Iran has "ended." Trump stated on Tuesday evening that operations to reopen the Strait of Hormuz would be paused for a short period to observe the progress of the agreement.

Simultaneously, Goldman Sachs maintains its price target for gold at $5,400 per ounce by the end of 2026, with support coming from central bank gold purchases, the normalization of speculative positioning, and expectations of future Fed rate cuts.

Market attention is shifting to the U.S. non-farm payrolls report due later this week, which will serve as a crucial guide for the Federal Reserve's subsequent interest rate path.