Gold rises over 1% on mounting Middle East peace hopes

Gold prices climbed more than 1% in European trading on Tuesday, resuming gains after a brief pause on Monday and heading toward a two-week high. The rally was supported by a weaker US dollar and lower oil prices, as optimism grew over a potential peace agreement in the Middle East, particularly following a partial ceasefire agreement in southern Lebanon.

Investors are now awaiting a series of key US labor market reports beginning today, which could help reshape expectations for the future path of Federal Reserve interest rates.

The Price

• Gold prices today: Gold rose 1.3% to $4,541.65 per ounce, from an opening level of $4,485.06, after touching an intraday low of $4,463.02.

• At Monday’s close, gold lost 1.2%, its first decline in three sessions, due to corrective selling and profit-taking after reaching a two-week high of $4,595.33 per ounce.

• Beyond profit-taking activity, gold prices also came under pressure from renewed military tensions between the United States and Iran.

US dollar

The US Dollar Index fell about 0.15% on Tuesday, resuming the losses that began late last week and reflecting weakness in the US currency against a basket of major and minor currencies.

The decline comes as risk appetite improves following a partial ceasefire agreement between Hezbollah and Israel, boosting hopes for further progress in ongoing peace negotiations between Washington and Tehran.

Oil prices

Global oil prices fell more than 2% on Tuesday, moving back toward five-week lows as expectations increased for a peace agreement between the United States and Iran and the eventual reopening of the Strait of Hormuz.

Top News

• Lebanon announced a partial ceasefire between Hezbollah and Israel.

• Trump said: “I had a very productive call with Hezbollah through high-level representatives, and they have agreed to a full ceasefire.”

• Trump said negotiations with Iran are continuing at a rapid pace.

• Trump stated that he is not concerned about oil prices, which surged after reports that Iran may fully close the Strait of Hormuz and suspend negotiations with the United States.

• Iran is seeking an end to hostilities on all fronts, along with the lifting of the naval blockade and easing of economic sanctions.

US interest rates

• According to the CME FedWatch Tool, market pricing for a Federal Reserve rate hike in December has fallen from 53% to 35%.

• The probability of leaving interest rates unchanged in June declined from 100% to 98%, while the probability of a 25-basis-point rate cut increased from 0% to 2%.

• Investors will continue monitoring incoming US economic data and comments from Federal Reserve officials to reassess interest-rate expectations.

• Later today, the US Job Openings report for April will be released. On Wednesday, markets will receive the ADP private employment report for May, followed by weekly jobless claims on Thursday and the official May nonfarm payrolls report on Friday.

Gold outlook

Market strategist Ilya Spivak said that investors entered the week expecting a possible 60-day ceasefire extension agreement over the weekend. However, both sides appear to have maintained their red lines, and no final agreement has been reached.

Spivak added that the key upside barrier remains near $4,900. If gold can firmly regain a foothold above the $5,000 level, it would signal a return to its long-term bullish trend.

SPDR Gold Trust

Gold holdings in SPDR Gold Trust declined by 0.28 metric tons on Monday, marking a third consecutive daily decrease. Total holdings now stand at 1,028.86 metric tons, the lowest level since October 15, 2025.