Gold prices edged higher on Tuesday (June 16) as a preliminary peace agreement between Washington and Tehran eased concerns of an interest rate hike by the United States Federal Reserve.
However, investors would like to await further details on the deal, apart from observing the post-ceasefire stability in the Middle East in the coming days.
Spot gold was up 0.3% at USD 4,317.43 per ounce and looked set to extend gains to a fourth straight session. US gold futures for August delivery, on the other hand, dipped 0.3% to USD 4,338.70. Among other commodities, spot silver fell 0.9% to USD 69.42 per ounce, platinum lost 0.3% to USD 1,762.34, and palladium was down 1.1% to USD 1,333.13.
While US President Donald Trump announced the signing of the “preliminary agreement” with the Iranian leadership to end the three-month-long Middle East conflict, details have yet to be made public. Also, as per Washington and Tehran, a permanent truce is yet to be negotiated.
“The peace deal announced over the weekend by President Trump has given a broad range of asset markets a welcome lift—including the precious metals complex. Gold has built on last Thursday’s (June 11) rally and appears well-positioned for further gains, though the next leg higher will largely depend on how this week’s FOMC meeting plays out. The Federal Reserve is widely expected to hold interest rates steady, but investors will be paying close attention to the views of new Fed Chair Kevin Warsh—particularly his stance on inflation. Should Warsh signal a willingness to look past current inflation levels, perhaps framing the peace deal as a disinflationary tailwind, rate-sensitive markets could receive a meaningful secondary boost,” said Nick Cawley, contributing analyst for gold and silver supplier Solomon Global, while talking about the yellow metal’s latest price movements.
“On the technical side, gold has a couple of key hurdles to clear. First, the spot price needs to push decisively above the 50-day simple moving average, currently sitting at USD 4,581/oz. Beyond that, the May 12 lower high at USD 4,773/oz. represents the next significant resistance level. A clean break above both would open the door to a more sustained move higher. With the political background improving, attention now shifts squarely to the Federal Reserve,” Cawley remarked.
The US dollar held near 10-day lows, making greenback-priced bullion cheaper for other currency holders. While the new Fed Chair Kevin Warsh will be holding his first policy decision-related meeting on Wednesday (June 17), investors predict the interest rate will remain the same.
“Markets are expecting no rate decreases this year. If Warsh signals that at least one cut could be on the table later this year, the dollar should decrease further and we could see another rally in gold. However, if he comes across as more hawkish on rates, gold could come under some pressure,” said Edward Meir, an analyst at Marex, while interacting with Reuters.
According to the CME FedWatch tool, traders have scaled back expectations for a Fed rate hike in December 2026 to 57% from last week’s 70% after the conclusion of the preliminary Iran peace deal. Gold is known for losing its appeal when rates are high, as it does not yield interest.
However, investors also need to keep a watch over the latest World Gold Council (WGC) survey, which witnessed a record 45% of the reserve bank managers (up 2 percentage points from a year ago) expecting to increase their own institutions’ gold holdings over the next 12 months.
The majority, 54% of 74 central banks that responded to the WGC’s annual survey, conducted between February 5 and May 19, said their holdings would remain unchanged, while 1% anticipated a decline. These responses came immediately after the Iran War’s outbreak, a phenomenon that triggered a rally in oil prices and drove gold prices down.
“Central banks remain keen on gold, and the recent price fall has not changed their minds,” said Shaokai Fan, head of the central banks sector at the WGC.
As per the consultancy Metals Focus, while gold demand from central banks will slow down by 15% year-on-year in 2026 in tonnage terms, it will remain above pre-2022 levels, a consistently supportive factor for the market.
As per the WGC, 93% of the survey respondents reported already holding gold, up from 81% a year ago.
“Among the drivers for gold ownership, a record 90% of respondents cited its performance during times of crisis. The top answers also included a long-term store of value and portfolio diversification. Gold’s role as a geopolitical risk hedge was favored among emerging market and developing economy respondents (85%),” the study noted further.
Amid a section of the central banks continuing the relocation of their gold reserves, 9% of respondents said they had increased domestic storage in the past 12 months, up from 5% in 2025. Some 10% said they had diversified their overseas storage locations, up from 2%.
“Within 12 months, 7% plan to increase domestic storage, and 9% plan to diversify overseas locations,” said the WGC study, which also showed that the Bank of England (BoE) remained the most popular vaulting location, followed by domestic storage and the Bank for International Settlements (BIS).