Gold prices surge to three-week high amid US-Iran ceasefire

Kathmandu. Gold prices have seen a significant surge in the international market following a two-week ceasefire agreement between the United States and Iran.

After US President Donald Trump decided to postpone attacks on Iran, fears of an energy crisis and inflation have slightly eased. However, as investors flock to safe-haven assets, gold prices reached a three-week high on Wednesday.

In the international market, the price of spot gold rose by 2.3 percent to $4,812.49 per ounce. In early trading, gold prices had risen by more than 3 percent, reaching their highest level since March 19.

US gold futures for June delivery also rose by 3.4 percent to $4,841.60 per ounce. After President Trump announced a two-week 'pause' based on Iran's 10-point proposal, investors have begun re-evaluating near-term risks.

Previously, Trump had threatened to destroy Iran if the Strait of Hormuz was not opened, which had rattled global markets. According to independent metal trader Tai Wong, this price increase is merely an immediate market reaction, and the future direction will depend on whether Iran adheres to the agreement. The $4,930 to $5,000 per ounce range is now seen as the key challenge for gold.

This diplomatic effort, mediated by Pakistan, does not yet signal a complete end to the war. Iran's Supreme National Security Council stated that talks would begin in Islamabad on April 10, but clarified that this cannot be considered the end of the war.

Fears remain that rising fuel prices will drive inflation, complicating central bank interest rate decisions. Research from the Federal Reserve Bank of Dallas projects that if there is a prolonged disruption in oil trade, US inflation could exceed 4 percent by the end of the year. In such uncertainty, gold is considered a safe-haven asset.

Since the start of the Iran war on February 28, gold prices had fallen by more than 8 percent, but recent political developments have pushed them back up. Investors are now focused on the minutes of the US Federal Reserve's March meeting.

Along with gold, the prices of other precious metals have also increased. Silver prices rose by 4.9 percent to $76.48 per ounce, while platinum and palladium prices saw increases of 3.2 percent and 4.1 percent, respectively.