Gold rises above $4,800 as Iran agrees to two-week ceasefire

NEW YORK (April 7) Gold price (XAU/USD) rises to near $4,815 during the early Asian session on Wednesday. The precious metal attracts some buyers after US President Donald Trump agrees to suspend Iran bombing for two weeks. 

Trump revealed in a post on Truth Social late Tuesday that he’d agreed to a two-week ceasefire with Iran on the condition that Iran agree to reopen the critical Strait of Hormuz. A White House official said that Israel has also agreed to the ceasefire.

This action came after Pakistan, a mediator between the US and Iran, requested that Trump grant a two-week ceasefire and extension to a deadline he imposed on Iran to end its blockade of Gulf oil. 

An Iranian official stated that negotiations with the US will be held in Islamabad, Pakistan, to finalize details, aiming to confirm Iran’s battlefield achievements politically within a maximum of 15 days. Iran added that the meeting will begin on Friday and may be extended if both sides agree.

Oil prices have surged since the Iran conflict intensified, raising supply concerns. Higher energy costs feed into inflation, leaving central banks with little leeway to cut interest rates. Gold is often used amid geopolitical uncertainty but does not yield interest, making it less attractive when interest rates are high.

Traders will keep an eye on the minutes from the Federal Reserve’s ‌(Fed) meeting in March, which will be released on Wednesday.

FXStreet