Gold Edges Higher as US-Iran Deal Dents Rate Hike Bets

VG Markets · 2026-06-16T06:57:21Z
Gold Edges Higher as US-Iran Deal Dents Rate Hike Bets

Gold (XAU/USD) is pushing higher in Tuesday's Asian session, extending Monday's rally after the US and Iran signed a memorandum of understanding to end hostilities. The deal has eased inflation fears across markets — pulling down Treasury yields, the US Dollar, and oil simultaneously — and in doing so, reduced the pressure on the Federal Reserve to hike rates further.

"The gold market is moving past the conflict and pricing it out. The peace deal took down Treasury yields, the dollar, and oil — and those were the biggest inflation and cross-asset risks," said Phillip Streible, Chief Market Strategist at Blue Line Futures.

Rate Hike Bets Retreat — A Direct Tailwind for Gold

┌──────────────────────────────┬────────────────────────────────────────────┐
│ Indicator                    │ Current Status                             │
├──────────────────────────────┼────────────────────────────────────────────┤
│ Dec Rate Hike Probability    │ 58% — down from ~70% last week             │
│ Source                       │ CME FedWatch Tool                          │
│ Fed Decision (Wednesday)     │ Hold expected at 3.50%–3.75%              │
│ XAU/USD Bias                 │ Cautiously bullish near-term               │
└──────────────────────────────┴────────────────────────────────────────────┘

As a non-yielding asset, gold benefits directly when rate hike expectations fall. With swap traders now pricing in a lower peak rate path, the opportunity cost of holding gold has declined — a classic setup for upside momentum.

The Deal: Positive, But Not Without Caveats

Bloomberg reported that President Trump and Vice President JD Vance signed an electronic copy of the memorandum with Iran. Trump stated the Strait of Hormuz is "already partially opened" and would be "completely opened" by Friday — without tolls.

Iran, however, intends to collect transit fees in the waterway, directly contradicting the US position. Trump also warned that military strikes on Tehran would resume if a final nuclear accord is not reached. Both sides offering conflicting accounts on key terms means the deal remains fragile, and gold's safe-haven premium has not been fully unwound.

Key Technical Levels to Watch

┌─────────────────────┬──────────────────────────────────────────────────────┐
│ Level               │ Significance                                         │
├─────────────────────┼──────────────────────────────────────────────────────┤
│ $4,363              │ Immediate resistance — June 9 high                   │
│ $4,415              │ Bollinger midband — key recovery trigger             │
│ $4,145              │ Key support — lower Bollinger band                   │
│ RSI (~43)           │ Below midline — lingering downside risk              │
└─────────────────────┴──────────────────────────────────────────────────────┘

Near-term structure remains cautious — price sits below both the 100-day SMA (~$4,762) and Bollinger midband, with RSI at ~43 signaling the rally still needs confirmation.

Southeast Asia Trader Outlook

For traders across Singapore, Malaysia, and Indonesia, this week presents two overlapping catalysts: the evolving US-Iran dynamic and Wednesday's Fed decision. A hold with dovish guidance from Chair Warsh would likely accelerate gold's recovery. A hawkish surprise, however, could cap gains quickly.

Trade XAU/USD CFDs on VG Markets with live pricing and tight spreads — set your alerts ahead of Wednesday's 14:00 ET Fed announcement.

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Sources: Bloomberg, CME FedWatch Tool, Blue Line Futures (Phillip Streible), FXStreet.