Gold did something unusual on Thursday—it rallied hard even as stocks soared and oil tanked. Spot prices climbed about 0.3%, settling around $4,719–$4,720 per ounce after touching intraday highs above $4,850. June futures did even better, jumping roughly 1.3–4% to levels near $4,745–$4,851. That's a near three-week high, and it happened despite the kind of risk-on party you'd normally expect to drag bullion lower.
Gold defied typical market logic Thursday, surging to near three-week highs while stocks rallied and oil prices collapsed.
The catalyst? A two-week U.S.–Iran ceasefire brokered with Pakistani help. Six weeks of conflict just hit pause, and markets exhaled. Oil absolutely cratered—Brent fell somewhere between 6% and 16%, while U.S. crude dropped nearly 20% as fears over Strait of Hormuz disruptions evaporated. Equities ripped higher across Asia and the U.S., with major indices up over 2%. The dollar weakened about 1% to a four-week low. Classic risk-on stuff.
Yet gold kept climbing. Why? Because the ceasefire is fragile and short-term, and traders aren't idiots. Analysts noted the truce's durability is anybody's guess, so hedging demand stuck around. Gold's safe-haven appeal didn't vanish just because tensions cooled for a fortnight. Geopolitical uncertainty still looms, and bullion buyers clearly weren't ready to unwind their positions.
Then there's the macro piece. U.S. PCE inflation came in softer than expected, fueling hopes the Federal Reserve might ease up on its policy path. Lower-than-forecast inflation readings typically boost expectations for rate cuts or at least a slower hiking cycle, and that's gold-friendly. Real yield pressures ease, the dollar weakens further, and non-U.S. buyers find bullion cheaper. When a country's inflation rate falls relative to its trading partners, its currency typically gains strength in forex markets, making dollar-denominated assets like gold cheaper for international buyers. It's a dual catalyst rally—geopolitical jitters plus dovish rate expectations. The softer PCE print reinforces how inflationary pressures directly influence currency valuations, which in turn impacts gold's appeal across forex markets. Markets are now pricing in a higher probability of monetary policy shifts, which tend to ripple through exchange rates and ultimately reshape demand dynamics for dollar-priced commodities.
