A ceasefire gives gold a reprieve — but not a recovery

Spot gold surged as much as 3% to $4,850 an ounce — its highest level in three weeks — after the United States and Iran agreed to a two-week ceasefire. The move reversed some of gold’s brutal March selloff, which had been driven by a liquidity crunch and rising oil prices that pushed inflation expectations higher. As oil eased, so did the market’s conviction that central banks would keep rates elevated indefinitely. That shift revived the appeal of non-yielding bullion, which thrives when real interest rates fall.

The repricing was immediate. Traders began dialing back the odds of prolonged high rates, a development that directly reduces the opportunity cost of holding gold. The metal had been hammered earlier in the year as war-driven oil spikes led markets to price in tighter monetary policy for longer. Now, with the immediate threat receding, gold reclaimed ground lost during the panic.

But the rebound is not a signal of sustained strength. Analysts warn the move reflects a recalibration of risk, not a regime change. The ceasefire is conditional and narrow, lasting just fourteen days. Any disruption — particularly around the Strait of Hormuz — could reignite turmoil. “We’re still not out of the woods,” said Marex analyst Edward Meir. Pepperstone strategist Ahmad Assiri called the rally a temporary “window of relief,” not a durable turnaround.

Long-term conviction remains intact. Goldman Sachs still targets $5,400 per ounce. Wells Fargo sees $6,300. The World Gold Council notes that March’s sell-off stemmed from deleveraging, not broken fundamentals. Early April brought positive ETF inflows across regions, and demand for longer-dated options hedges is rebuilding. The selloff has stopped. Any sustained recovery, however, depends entirely on whether the truce holds when the clock runs out.