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Gold prices surged over 2% to above USD4800 following a two-week ceasefire between the US and Iran, as reported by DBS Group Research’s Eugene Leow. The temporary de-escalation reduced immediate geopolitical risks, boosting demand for safe-haven assets like gold. The Hormuz Strait, a critical oil shipping route, remains a focal point for traders assessing regional tensions.
The ceasefire's impact on market sentiment highlights gold's role as a hedge against geopolitical uncertainty. Traders are closely monitoring whether the pause in hostilities will lead to a lasting resolution or renewed volatility. A stable resolution could weaken the US dollar, further supporting gold prices, while renewed tensions might drive prices higher due to increased safe-haven demand.
For Gulf investors, the situation underscores the interconnectedness of regional security and global commodity markets. The Hormuz Strait's stability directly affects oil prices, which in turn influence gold's performance. Investors should watch for updates on diplomatic developments and potential shifts in oil market dynamics, as these could trigger significant moves in gold and other commodities.
