Gold rose on Thursday, erasing most of the previous session’s losses, and is currently trading above the key level of $4,300. The yellow metal is now attempting to break above the daily pivot point at $4,328; if it succeeds, it could retest resistance levels at $4,380 then $4,421. On the downside, if the price falls below the aforesaid pivot point, it could test support levels near $4,256 then $4,214.
Global markets are closely monitoring a series of significant developments as geopolitical tensions show signs of easing and monetary policy remains in focus. The United States and Iran have signed a ceasefire agreement, raising hopes for greater stability in the Middle East and reducing concerns over disruptions to global energy supplies. Meanwhile, the Federal Reserve has kept interest rates unchanged at 3.75%, signaling a cautious approach as policymakers continue to assess inflation and economic conditions. Supported by expectations that U.S. interest rates will remain elevated for longer, the U.S. dollar has held near a two-month high, reflecting continued investor confidence in dollar-denominated assets amid an uncertain global economic environment.
Market Watch
US and Iran presidents sign ceasefire agreement
The United States and Iran announced today that they have reached a formal ceasefire agreement, following the signing of a memorandum of understanding by U.S. President Donald Trump and Iranian President Masoud Pezeshkian. The agreement aims to end the military confrontation between the two countries and pave the way for broader political negotiations in the coming period.
Under the terms of the agreement, all military operations will cease immediately, the Strait of Hormuz will remain open to international shipping, and a 60-day negotiation period will begin to seek a lasting resolution to outstanding issues, including Iran’s nuclear program and economic sanctions imposed on Tehran.
Several international parties welcomed the agreement, describing it as an important step toward easing tensions in the Middle East and reducing risks to global energy markets. The International Atomic Energy Agency (IAEA) also expressed its readiness to begin technical consultations related to the implementation of the nuclear-related provisions of the deal.
Despite the positive atmosphere surrounding the announcement, President Trump emphasized that Iran’s adherence to the agreement would be a key condition for maintaining the ceasefire and avoiding a return to military escalation.
The memorandum is widely viewed as the most significant direct agreement between Washington and Tehran in decades, marking a potentially historic turning point in relations between the two countries.
Federal Reserve Holds Interest Rates Steady at 3.75%
The U.S. Federal Reserve announced that it would leave interest rates unchanged at its latest policy meeting, maintaining the target range at 3.50% to 3.75%, in a decision that was widely expected by financial markets.
The central bank stated that the U.S. economy continues to demonstrate resilience despite persistent inflationary pressures and heightened uncertainty stemming from global geopolitical developments. Policymakers noted that inflation remains above the Fed’s 2% target, warranting continued monitoring of incoming economic data before making further adjustments to monetary policy.
The decision came during the Federal Open Market Committee’s latest meeting, where officials reiterated their commitment to achieving price stability while supporting a strong labor market. The Fed emphasized that future policy decisions will remain data-dependent and will be guided by economic conditions in the months ahead.
Updated economic projections showed that several policymakers now see the possibility of another interest rate increase before the end of the year if inflationary pressures persist, while expectations for rate cuts have been scaled back compared with previous forecasts.
Following the announcement, the U.S. dollar remained near a two-month high as investors closely analyzed the Federal Reserve’s statement and comments from policymakers for clues about the future direction of U.S. monetary policy.
U.S. Dollar Holds Near a Two-Month High
The U.S. dollar maintained its gains during trading on Thursday, holding near its highest level in two months against a basket of major currencies, supported by expectations that the Federal Reserve will keep monetary policy restrictive for an extended period.
Greenback’s strong performance followed the Federal Reserve’s decision to leave interest rates unchanged while signaling that inflation risks remain elevated and that any future easing of monetary policy will depend on further progress in inflation data over the coming months.
The U.S. Dollar Index, which measures the currency against six major peers, remained supported by increased demand for safe-haven assets amid ongoing geopolitical tensions and uncertainty surrounding the global economic outlook.
The dollar also received additional support from higher U.S. Treasury yields, as investors continued to bet that interest rates would remain elevated for longer than previously expected, enhancing the attractiveness of dollar-denominated assets relative to competing currencies.
Meanwhile, several major currencies, particularly the Japanese yen and the euro, remained under pressure as the divergence between global central bank policies and the Federal Reserve’s monetary stance continued to favor the U.S. currency.
Investors are now awaiting further U.S. economic data releases, particularly inflation and labor market figures, for additional clues regarding the future path of interest rates and the direction of the dollar in the months ahead.
Looking Ahead
Market participants are now turning their attention to key U.S. economic data scheduled for release later today, including the Philadelphia Fed Manufacturing Index and Initial Jobless Claims. The reports are expected to provide fresh insights into the health of the manufacturing sector and labor market, two areas closely monitored by Federal Reserve officials when assessing the outlook for economic growth and inflation. Stronger-than-expected readings could reinforce expectations that interest rates will remain elevated for longer, while weaker data may increase speculation about potential policy easing in the months ahead.