Gold prices climbed to near a three-week high on Wednesday as markets began reassessing short-term risks after U.S. President Donald Trump agreed to pause attacks on Iran for two weeks. This move helped ease concerns over inflation linked to energy prices.

In a social media post, Trump said he had agreed to a two-week ceasefire while the U.S. administration reviews a 10-point peace proposal put forward by Iran. According to him, most of the previous disagreements have been narrowed, and this period would create room to finalize and implement an agreement.

The news had an immediate impact on financial markets: U.S. equities rallied sharply, while crude oil prices fell significantly. S&P 500 futures rose more than 2%, while WTI crude dropped as much as 18% during the overnight session.

Spot gold rose 2.3% to USD 4,812.49 per ounce at 02:15 GMT, after briefly gaining more than 3% its highest level since March 19.

Although geopolitical risks remain present, gold has recently struggled to attract safe-haven flows. Over the past month, gold prices fell more than 11%, marking the steepest monthly decline since the early 1980s. The main reason was liquidity pressure, as both investors and central banks were forced to sell.

At the same time, rising inflation concerns pushed interest rate expectations higher, increasing the opportunity cost of holding gold.

Although the ceasefire is expected to help ease supply chain pressure, many experts believe it is still too early to fully assess the economic impact. The next focus will be the extent of the damage to global growth and the broader spillover effects of energy prices.

Notably, if energy prices cool again, central banks may choose to “look through” what is seen as temporary inflation pressure, thereby reducing the likelihood of policy tightening a factor that could be supportive for gold.

However, the biggest risk remains the possibility that the ceasefire will not hold. If the conflict escalates again, the familiar scenario may return: oil prices surge, the U.S. dollar becomes the primary safe-haven asset, and other markets including gold continue to face pressure.

Technical Analysis: Trendline Break Confirms the Return of an Uptrend

From a technical perspective, gold has broken above an important descending trendline that had capped prices since early March. This is a confirming signal that the bullish trend may be returning.

In terms of wave structure, gold is currently moving within Million-Dollar Model No. 1, following the five-wave structure t1 – l1 – t2 – l2 – t3 in white. The market has just entered the upward movement from l2 to t3, indicating that bullish momentum remains very strong.

If this momentum is sustained, the current upward move could bring gold back toward the USD 5,000/oz area in the near term.

Conclusion

The break above the descending trendline is an important technical signal, showing that the market has undergone a meaningful change in its short-term trend structure.

In the current context, the preferred strategy is to follow the upward trend, especially as the wave structure is supporting this scenario. However, geopolitical developments still need to be monitored closely, as any reversal in the conflict could quickly shift market sentiment.

Risk management remains the key factor, but if the trend continues to hold, gold may have the opportunity to extend its gains toward higher price levels in the coming period.

Ebila AI continuously monitors market developments closely, combining both fundamental and technical analysis to help investors gain a more comprehensive view and make more effective decisions.

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