Markets reacted strongly to developments in US-Iran ceasefire negotiations, with risk sentiment and asset prices shifting in response to both optimistic and pessimistic headlines. US President Donald Trump stated on Thursday that 'We're very close to a deal with Iran,' and warned that military actions would resume if a deal is not closed. Trump also claimed Iran is willing to give up its enriched uranium and surrender its nuclear ambitions [1][3][4]. However, Reuters reported that US and Iranian negotiators have scaled back expectations for a lasting peace agreement, now seeking a 'temporary memorandum' to avoid further escalation [2][5]. Iranian sources emphasized that the US must fulfill its commitments before any meaningful negotiations can proceed [5].
The US Dollar Index (DXY) traded 0.1% lower near 98.08, close to a six-week low of 97.83, reflecting diminished safe-haven demand as ceasefire optimism grew [1][3][4]. This weakness supported precious metals, with Gold (XAU/USD) consolidating at $4,790 after retreating from a one-month high of $4,871 earlier in the week. Technical indicators for Gold showed fading bullish momentum, with resistance at $4,850 and key support at $4,600 [2]. Silver (XAG/USD) rebounded above $79.40, gaining 1.25% on the day, as lower US Dollar and easing Middle East tensions encouraged demand for non-yielding assets. Lower inflation expectations and bets on a more accommodative Federal Reserve stance further supported Silver prices [4].
Brent Oil experienced significant volatility, nearly touching $100/bbl on Thursday before retreating to $99.39/bbl (+4.70%) as traders responded to shifting war headlines. Earlier pessimistic reports about the peace deal drove Brent higher, while Trump's optimistic comments prompted profit-taking and a modest pullback. Iranian media stressed the need for US commitments before negotiations could progress [5]. Despite oil price swings, US equity markets continued to rally, with S&P 500 futures up 0.2% to near 7,060 [3][5].
The Australian Dollar (AUD) outperformed major peers, trading 0.16% higher to near 0.7175, buoyed by broader risk rally and optimism for a US-Iran ceasefire. The AUD was the strongest against the New Zealand Dollar, and market participants expect further rate hikes from the Reserve Bank of Australia, which raised its Official Cash Rate by 25 bps to 4.1% in March [3].
Technical analysis across assets indicated continued downside risk for USD/CHF, which traded 0.15% lower at 0.7825 and exhibited a Bearish Flag formation. Key support for USD/CHF lies at 0.7798, with resistance at 0.7850 and 0.7883 [1]. Gold and Silver remain vulnerable to further consolidation if ceasefire optimism persists and the US Dollar stays weak [2][4].
CONCLUSION
US-Iran ceasefire negotiations have driven high volatility across FX, commodities, and oil markets, with risk assets rallying and safe-haven demand waning. While optimism from US officials supports risk sentiment, conflicting reports from Iranian sources and Reuters highlight uncertainty about a lasting peace deal. Market participants remain focused on upcoming negotiations, with asset prices poised to react to further developments.