JAKARTA - Global gold prices jumped on April 8 after the United States and Iran agreed to a two-week ceasefire. However, the direction of the precious metal's movement will depend on the durability of the ceasefire, oil prices, and the direction of US interest rates.
According to a report by The Straits Times quoted Wednesday, April 8, spot gold prices rose more than 3 percent to around US$4,800 per ounce by midday. Meanwhile, gold futures rose 2 percent.
Despite strengthening, gold prices are still down about 7 percent in the past month and are still about 13 percent below their record high of US$5,589 per ounce on January 28.
The ceasefire agreement also encouraged the weakening of the US dollar against other major currencies. The Bloomberg Dollar Spot Index fell 0.7 percent. Against the Singapore dollar, the US dollar weakened 0.5 percent to S$1.2750, after touching S$1.2741, the lowest intraday level since March 24.
The decline in oil prices after the deal also affected the movement of gold. Lower energy prices can ease inflationary pressures and raise expectations that central banks, especially the Federal Reserve, do not need to raise interest rates more aggressively. On the other hand, a weaker dollar also makes gold cheaper for investors holding other currencies.
OCBC foreign exchange strategist Christopher Wong, still quoted from The Straits Times report, said the surge in gold prices reflected the release of some of the geopolitical risk premiums that have weighed on gold since March. According to him, the next move will depend on whether the ceasefire holds and whether lower oil prices open up room for easing the US Federal Reserve's interest rates.
A more cautious view comes from Alex Ho, sales trader at CMC Singapore. He assessed that the surge in gold prices was a spontaneous market reaction after the announcement of the ceasefire. Even so, according to him, gold's supporting factors such as central bank purchases, a weaker dollar, and high inflation still exist.
Throughout 2025, gold prices jumped 60 percent due to geopolitical risks, lower interest rate expectations, and central bank purchases. The rise continued in 2026, before the Iran war wiped out all of this year's gold gains.
Amid the turmoil, the People's Bank of China remained the main buyer. In March, its gold reserves increased by 160,000 troy ounces, so the buying trend continued for 17 consecutive months.
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