A landmark US-Iran peace deal has driven significant moves in precious metals and currency markets. On Thursday, the Indian Rupee (INR) advanced against the US Dollar (USD) as risk aversion faded following a BBC report that the White House confirmed US President Donald Trump and Iranian President Masoud Pezeshkian signed a preliminary memorandum of understanding to end the US-Israel war on Iran, with Pakistan’s Prime Minister Shehbaz Sharif stating the agreement is taking immediate effect [1][3][4]. This development led to a decline in the USD/INR pair and eased global energy supply anxieties by fully reopening the Strait of Hormuz, which also contributed to a drop in crude oil prices [1][3][4].
Gold prices in India rose, with FXStreet data showing gold at 13,161.69 INR per gram on Thursday, up from 12,985.20 INR the previous day. The price per tola increased to 153,515.30 INR from 151,456.80 INR [2]. Internationally, Gold (XAU/USD) climbed back above $4,300 during the Asian session, supported by USD profit-taking after the US-Iran deal. However, the overnight attempt to break above the $4,350-$4,360 resistance failed, and the Relative Strength Index (RSI) near 44 signaled subdued momentum, while the MACD histogram turned marginally positive, hinting at a tentative loss of bearish pressure [4].
Silver (XAG/USD) also rose, trading near $69.15, but remained constrained below the 100-day simple moving average. Technical analysis indicates initial resistance at $70.00 and support at $66.81, with the RSI around 45 suggesting subdued bullish momentum [3]. The positive sentiment in precious metals was attributed to the US-Iran peace deal lowering crude oil prices and easing inflation concerns, which boosted demand for non-yielding assets like gold and silver [3][4].
The US Federal Reserve, under new Chair Kevin Warsh, kept its benchmark rate unchanged at 3.5%-3.75% but signaled a hawkish stance, with half of FOMC members expecting at least one rate hike this year and policymakers projecting a fed funds rate of 3.8% by year-end, up from 3.4% in March [1][4]. Traders are now pricing in an 85% chance of a 25-basis-point hike in December [4]. The prospect of higher US rates typically weighs on emerging markets and non-yielding assets, and Indian equities fell following the Fed's decision [1][4].
Looking ahead, traders are watching US economic data releases and comments from FOMC members for further direction. The technical outlook for gold and silver remains cautious, with resistance levels yet to be decisively breached and momentum indicators signaling limited upside in the near term [3][4].
CONCLUSION
The US-Iran peace deal has weakened the US Dollar and boosted gold and silver prices, despite the Federal Reserve's hawkish signals. While precious metals have attracted buyers on easing geopolitical risks and lower oil prices, technical resistance and the prospect of higher US rates may limit further gains. Market participants remain cautious, awaiting additional economic data and central bank commentary for clearer direction.