Overview
- A preliminary US and Iran framework to end hostilities and reopen the Strait of Hormuz triggered a rapid market re‑rating that pushed spot gold above $4,300 an ounce and silver toward $70 on Monday.
- The immediate rally was driven by a softer dollar and a more than 4% drop in oil, which reduced near‑term inflation worries and lowered the probability of additional Fed rate hikes.
- Domestic markets saw fast pass‑through: Indian MCX gold futures spiked to about Rs 1,53,800 per 10g and jewellery stocks gained, while Pakistan’s retail gold jumped roughly Rs10,800 per tola.
- Traders warn the move is conditional because the framework still requires formal signing in Switzerland and the Fed’s policy signals this week under Chair Kevin Warsh will shape whether gains hold.
- Beyond price moves, the shift could ease energy‑supply risk tied to the Hormuz chokepoint, lower fuel‑linked inflation for consumers, and prompt investors to reallocate from yield‑bearing assets into bullion.