FX.co ★ Gold Surges 2% as US-Iran Ceasefire Eases Inflation Fears

Gold prices climbed nearly 2% to $4,790 per ounce on Wednesday, their highest level since March 19, after the United States and Iran agreed to a two-week ceasefire, easing concerns over energy-driven inflation. Former President Trump said Washington had consented to halt attacks for two weeks and had received a “workable” 10-point proposal from Tehran as a basis for further negotiations. In turn, Iran pledged to keep the Strait of Hormuz open to guarantee safe passage for vessels.

The de-escalation pushed energy prices lower and led investors to reassess their interest rate outlook for 2026. Markets now expect the Federal Reserve to keep borrowing costs unchanged this year, unwinding earlier fears that persistent inflation might force another rate hike before year-end.

Although gold is traditionally viewed as a hedge against inflation and geopolitical uncertainty, its attractiveness typically diminishes in a high interest rate environment, as it offers no yield. Since the onset of the Iran conflict on February 28, bullion has fallen by more than 8%.