Gold rose to its highest levels in three weeks on Wednesday after the United States and Iran agreed to a two-week ceasefire, calming inflation fears that have upended global markets.
The spot price of gold rose as much as 3% to more than $4,850 an ounce, extending the previous session’s gains in the run-up to the ceasefire announcement.
Gold has been under pressure in recent weeks amid fears that rising oil prices due to the conflict in the Middle East will create inflationary pressures and prevent central banks from cutting interest rates, a scenario that benefits non-yielding assets such as gold.
The latest spike comes after the United States and Iran agreed to halt strikes for two weeks, alleviating some of these concerns. This takes gold back to levels last seen on March 19, although prices are still down 9% since the war began, as the metal recovers from its worst monthly performance since 2008.
“The ceasefire calms markets and eases pressures. It could help reduce some inflationary pressures and could open the door to a rate cut from the Fed, which is bullish for gold,” Marks analyst Edward Meier said. Reuters previously.
“Relief window”
However, Meir and others also warned that any recovery for gold at the moment remains fragile until there is more clarity on the “deal” between the US and Iran.
“There are a lot of elements that need to be negotiated,” Meir said. “They could easily unravel, and there could be a short-term recovery in all markets. We are still not out of the crisis yet.”
Ahmed Asiri, a strategist at Pepperstone Group, said that gold’s rise above $4,800 reflects “a recalibration of risks, not a complete shift in the system.”
“The move higher indicates that markets are now underestimating the potential for long-term disruption, while still maintaining a significant discount compared to pre-Iran settings,” he wrote in a note cited by Reuters. Bloomberg.
“In the near term, gold remains very sensitive to political developments,” Asiri continued. “The current ceasefire offers an opportunity for relief, but it is conditional and fragile. Any sign of collapse, especially around the Strait of Hormuz, is likely to create volatility and downside risks.”
In the long term, analysts still expect bullion to maintain its upward trend as inflation risks fade. Recently, Goldman Sachs reiterated its price target of $5,400 per ounce – about 13% above current levels. Wells Fargo gold prices have also doubled recently, with an upside target of $6,300 per ounce.
So far in 2026, gold is up 8.5%, with most of its gains coming in January, where it rose toward a record high of nearly $5,600 an ounce.
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