Spot Gold surged to a three-week high above $4,850/oz. on Wednesday and the US Dollar plumbed a nearly one-month low, as the US and Iran have agreed to a two-week ceasefire, while Tehran is to reopen the Strait of Hormuz.
US President Donald Trump announced in a post on Truth Social that he would suspend planned military strikes against Iran for two weeks, provided Tehran agrees to a complete, immediate, and safe opening of the Strait of Hormuz. Iran indicated that it had accepted a two-week ceasefire, with talks set to begin on Friday in Islamabad, Pakistan.
Trump also said that the US had received a 10-point proposal from Iran, which the US President described as a “workable basis for negotiations.”
In a separate statement, Iran’s Foreign Minister, Seyed Abbas Araghchi, said that safe passage through the crucial waterway would be possible for a two-week period.
As a result, Crude Oil prices pulled back, easing energy-driven inflation fears and curbing expectations of a rate hike by the Federal Reserve. Such an outlook weighed on US Treasury yields and the US Dollar.
A softer dollar makes dollar-priced Gold more appealing to international investors holding other currencies.
Spot Gold was last up 2.29% on the day to trade at $4,812.71 per troy ounce.
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