Gold Prices Soar Again, Now Face Final 'Enemy'

Gold and silver prices have surged after expectations of interest rate hikes by the Federal Reserve (The Fed) this year have subsided. This sentiment emerged following the achievement of a temporary peace agreement between the United as States (US) and Iran, which has pressured oil prices and reduced inflation concerns.

According to Refinitiv, gold prices closed at US$ 4,330.13 per troy ounce on Tuesday trading (16/06/2026), marking an increase of 0.56%. This rise extends its positive trend, gaining 6.3% over four consecutive days.

In today’s trading, Wednesday (17/06/2026) at 06:34, gold prices edged up 0.13% to US$ 4,335.81.

The temporary peace agreement announced by US President Donald Trump extends a fragile ceasefire between the US and Iran for 60 days and reopens the Strait of Hormuz, which had been blocked by Iran since US and Israeli attacks in February.

David Meger, Director of Metal Trading at High Ridge Futures, stated that the prospect of an end to the war between the US and Iran has been a primary factor supporting gold prices over the last two sessions. According to him, the impact of the agreement includes lower short-term interest rates, falling energy prices, and a reduced likelihood that the Fed will need to raise interest rates again this year.

Brent crude oil prices also fell below US$80 per barrel for the first time since early March, after plunging nearly 5% on Monday following the announcement of the deal.

CME FedWatch data shows that market participants now estimate a 60% chance of a Fed rate hike in December, down from approximately 70% last week. During the US-Israel war against Iran, gold faced pressure as surging oil prices increased expectations of higher interest rates persisting for longer. Although known as a hedge against inflation, gold, which provides no yield, tends to be less attractive when interest rates are at high levels.

“What has supported the market in the last two sessions is the prospect of reaching an agreement between the United States and Iran to end the war,” said David Meger, Director of Metal Trading at High Ridge Futures, as quoted by Refinitiv. “The impact we are seeing from this development is the decline in short-term interest rates, falling energy prices, and the reduced likelihood that the Fed will need to raise interest rates again this year,” he added.

Market participants are now awaiting a series of central bank meetings this week, including the Fed’s interest rate decision on Wednesday, which marks the first meeting under the leadership of the new Fed Chair, Kevin Warsh. The Fed remains the ‘final enemy’ for gold to soar higher. If the Fed adopts a more dovish stance, gold could fly higher; however, if it remains hawkish, gold could face renewed pressure. A hawkish Fed could lead to a strengthening dollar, which would likely dampen demand for gold.