Everbright Futures: Ceasefire Signal Boosts Gold Prices for a Strong Rebound

U.S. President Trump most recently said that the core military objective of preventing Iran from acquiring nuclear weapons has been achieved, and regardless of whether a final agreement is reached, the U.S. military will end hostilities against Iran within two to three weeks. Iranian President Pezeshkian also said on the same day that Iran is willing to end the war, provided the other side meets Iran’s demands—especially by making the necessary assurances of non-aggression. Although there are still gaps between the two sides’ demands, the release of a shared signal to end the war is already sufficient to prompt a partial adjustment in market expectations that geopolitical risks will continue to escalate. As a result, concerns about inflation have eased, and expectations that the Federal Reserve will not cut rates within the year—or may even raise them—have also receded, which has accordingly delivered a significant boost to precious metals prices. However, it is worth noting that the ceasefire signal has not yet been converted into a concrete ceasefire agreement. Fighting is still ongoing. The U.S. and Iran have launched attacks, with the U.S. striking Iran’s largest island, Qeshm, causing a local seawater desalination plant to be completely paralyzed, while Iran has listed relevant institutions and facilities of 18 U.S. companies in the Middle East as legitimate targets for strikes. In addition, the U.S. has begun deploying its third aircraft carrier, the “Bush” aircraft carrier, to the Middle East. Whether the ceasefire intention expressed by both sides is a prelude to genuine negotiations or a “smokescreen” under military pressure remains to be seen, which also means the trading screen may see further reversals in the short term, and volatility may remain at high levels. (Everbright Futures)