Gold Trading Reminder: US-Iran peace agreement within reach, gold price surges nearly 3%! Geopolitical risks plummet, bulls get major respite

　　Source: HuiTong Financial News

　　The global gold market experienced a significant rebound on Wednesday (May 6),

prices briefly touched the highest level since April 27, with a single-day gain approaching 3%, fully reflecting the market's positive response to the rapid easing of geopolitical risks. This rally not only broke the recent volatile pattern, but also provided investors with an important window to re-evaluate gold's safe-haven properties and macro drivers. In the early Asian session on Thursday (May 7), traded within a narrow range and is currently trading around $4,695

　　Geopolitical Easing Becomes the Core Driver of Gold Prices

　　On Wednesday, gold prices surged mainly due to optimism over a potential peace deal between the US and Iran. Multiple media outlets cited Pakistani mediators and related sources as saying that Washington and Tehran are close to reaching an agreement on a "one-page memorandum" aimed at formally ending the Gulf conflict that erupted since February 28, followed by more in-depth negotiations.

　　The Iranian Foreign Ministry stated it is reviewing the latest US proposal and will respond via Pakistani channels. US President Trump also publicly stated that the two sides had "very good talks" in the past 24 hours and that Iran "very much wants to reach a deal." Although there are still substantive differences between the two sides over Iran's nuclear program, control of the Hormuz Strait, the missile program, and proxy forces, the market has clearly chosen to grasp the positive signals first, with a "risk-taking first, evaluation later" trading mentality spreading rapidly.

　　This expectation has directly alleviated market concerns about further deterioration in the Middle East situation, intensified inflationary pressures, and the prospect of high interest rates being maintained for a long time. Peter Grant, Vice President and Senior Metals Strategist at Zaner Metals, pointed out that optimism over the US-Iran deal, the retreat in oil prices, eased inflation fears, and a shift in Federal Reserve policy expectations have jointly brought significant short-term relief to the gold market.

　　Gold Price Movements Resonating with Dollar and Oil Prices

　　

dropped 0.48%, hitting its lowest level since late February, making gold priced in dollars more attractive to holders of other currencies. The euro and British pound futures

　　Employment Data Coming Soon, Fed Policy Expectations to be Tested

　　Investors have quickly shifted focus to key US economic data later in the week. The monthly non-farm payrolls report to be released on Friday will be the centerpiece, testing whether the resilience of the US economy is sufficient to support the Fed's current monetary policy or if a weakening labor market will reignite expectations of rate cuts.

　　The previously released ADP National Employment Report showed that the number of jobs added in the US private sector in April exceeded expectations, providing preliminary support for economic stability. However, the market remains cautious. St. Louis Fed President Musalem and other officials emphasized that inflation risks have shifted upward, and in the context of a stable job market, interest rates may need to remain unchanged for some time. The market has now largely ruled out the possibility of a Fed rate cut this year.

　　The bond market has also responded synchronously: the US 10-year Treasury yield fell back to 4.354%, a new low since April 27; the two-year yield posted a significant single-day drop, reflecting investors’ repricing as risk appetite improved. Strong US corporate earnings, boosted by artificial intelligence spending, have further supported economic growth expectations and to some extent limited the room for yields to fall.

　　Potential Risks and Assessment of Agreement Prospects

　　Despite strong market enthusiasm, analysts warn that there is still uncertainty about the prospects of the deal. Iran has described the US proposal as a "wish list" rather than a realistic text, and core differences between the two sides over nuclear facilities, the lifting of sanctions, shipping through the Strait, and missile issues have not been fully resolved. Trump himself has also expressed a more pessimistic attitude on social media and threatened the possibility of resuming bombing.

　　If a preliminary memorandum is reached, there will be a 30-day detailed negotiation period, targeting the lifting of sanctions, unfreezing assets, limiting uranium enrichment activities, and restoring shipping through the Strait. However, if either side hardens its stance, market optimism could quickly reverse.

　　Gold Outlook: Short-Term Positives and Long-Term Logic Coexist

　　In summary, the core driving force behind this round of gold gains is the "triple benefit" triggered by the expectation of a US-Iran peace deal: a sharp drop in oil prices easing inflationary pressure, a weaker dollar increasing gold’s appeal, and declining bond yields reducing holding costs. The market is quickly pricing in the most optimistic scenario of an end to the geopolitical conflict.

　　In the short term, as long as the positive atmosphere in peace talks is maintained, gold is expected to continue to receive support. But investors must also be clear that a truly comprehensive deal still faces 30 days of difficult negotiations and numerous political and technical obstacles. Friday’s US non-farm payrolls report will also be a key test for market expectations of Fed policy.

　　Overall, the potential conclusion of a US-Iran peace agreement has injected a strong dose of optimism into global markets. Gold has shown strong resilience in this rebound, and its future trajectory will depend on the sustainability of geopolitical easing and final confirmation from macro data.

　　

Editor: Wei Yihan