Gold Reclaims Ground as Iran Ceasefire Extends, Fed Uncertainty Lingers

Gold futures staged a measured recovery on Wednesday, settling at $4,758 per ounce on the COMEX — a gain of $19 on the session — as markets digested a complex cocktail of geopolitical relief and monetary policy anxiety. The advance, took place despite a stronger dollar following President Donald Trump's decision to extend the U.S.-Iran ceasefire indefinitely, allowing gold to scrape back a portion of Tuesday's steep sell-off that pushed prices to their lowest level since April 13.

Trump announced the ceasefire extension hours before the original two-week truce was set to expire, saying he would defer further military action until Tehran submits a new peace proposal. The announcement initially sent spot gold rebounding nearly one percent to trade around $4,755, while crude oil softened as the most acute risk of immediate re-escalation receded. 

The session's most significant headwind came not from the Middle East but from Capitol Hill. Federal Reserve Chair nominee Kevin Warsh appeared before the Senate Banking Committee and delivered remarks widely interpreted by traders as hawkish. Warsh made clear he had made no promises to the White House regarding rate cuts and pledged to pursue central bank independence while advancing broad structural monetary reforms. Markets had already priced a near-certainty that the Fed's April 28-29 meeting would leave the federal funds rate unchanged at 3.50-3.75%, but Warsh's testimony reinforced the likelihood of rates staying elevated well into the second half of the year. For gold — which pays no interest or dividend — a prolonged high-rate environment reduces its attractiveness relative to yield-bearing assets, and the prospect weighed on intraday momentum even as futures managed to close higher.

Despite the ceasefire extension, the geopolitical backdrop remains deeply unsettled. The Strait of Hormuz — a critical artery for global oil shipments — remains largely closed, with Iran refusing to reopen the waterway while the U.S. Navy maintains its blockade of Iranian ports. Tehran has characterized the blockade as an act of war. Meanwhile, planned peace talks that were set for Tuesday never materialized; Vice President JD Vance canceled a trip to Islamabad after Iran communicated through Pakistan that it would not attend. The ceasefire extension therefore appears to be largely a unilateral American posture, and analysts caution that its durability is far from assured. Any fresh escalation could reignite safe-haven demand for gold and push prices back toward the $4,900-$5,000 range that some desks had been targeting before the conflict began.

Underlying the daily volatility is a structural demand story that remains intact. Central banks have been net buyers of gold for 23 consecutive months, with the National Bank of Poland, Kazakhstan, Uzbekistan, and Malaysia among the most active accumulators in early 2026. The World Gold Council reported record quarterly demand of 1,313 tonnes in the third quarter of 2025 — a figure driven by both institutional buyers and retail investors seeking shelter from persistent inflation and currency risk. Total mine supply rose just one percent last year, offering little relief to a tight physical market. That combination of constrained supply and durable institutional demand provides a floor beneath prices even during periods of macro pressure.

The near-term trajectory of gold hinges on three converging forces. First is the diplomatic calendar: any credible resumption of U.S.-Iran negotiations could ease oil prices further, which would reduce inflationary pressure and, paradoxically, temper one of gold's key supports even as calmer markets reduce safe-haven urgency. Second is the economic data pipeline — Thursday's flash PMI readings for manufacturing and services sectors, along with weekly jobless claims, could move the needle on Fed expectations and, by extension, the dollar. Third is the Warsh confirmation timeline, which remains entangled with political dynamics including a Senate standoff over the ongoing inquiry into current Fed Chair Jerome Powell, who is expected to remain in the role past his May 15 term end. Leading financial institutions, including JPMorgan and Goldman Sachs, continue to project gold within a $4,000-$6,300 range for the year, and the metal has gained more than 40% over the past twelve months. Wednesday's close at $4,758 suggests the market is consolidating — not retreating.

Wishing you as always good trading,