Gold prices jumped over 2.5% after the US and Iran reached an initial agreement to end their war, pushing oil prices lower and easing worries about inflation and higher interest rates.
J.P. Morgan Global Research analysts expect gold to touch $6,000/oz by the end of the year, with $6,300/oz a possibility for 2027. However, the report’s authors note that future demand and price stability seem to depend on how the ongoing geopolitical conflicts are resolved and on Fed policy — and neither of these is certain at this time.
Gold prices had dropped nearly 20% since late February due to the US-Israeli conflict with Iran, especially after the Strait of Hormuz was closed, which had caused oil prices to surge. This had pushed up inflation worries and raised expectations of interest rates staying higher for longer — a situation that reduces gold’s appeal as an asset that pays no interest.
In 2026, gold has given investors almost no returns, with prices returning to the levels seen in January.
The biggest boost for gold right now seems to be the end of the Iran war. Gold prices rose above $4,300 an ounce on Monday for the third day in a row, following a US-Iran peace agreement to reopen the Strait of Hormuz. The agreement, expected to be signed on June 19 in Switzerland, reportedly includes lifting blockades, sanctions relief for Iran, and dismantling Tehran’s nuclear program.
As a result, oil prices and the dollar have fallen as markets reduce expectations of US interest rate hikes. The dollar index slipped to around 99.5 on Monday, its lowest level in over a week, making dollar-priced gold cheaper for holders of other currencies. Meanwhile, oil prices fell more than 4%, with Brent dropping over 4% toward $83 a barrel, touching a two-month low.
However, these supporting factors for gold could reverse if the agreement is not finalized positively on June 19 in Switzerland.
In the Indian market, the MCX gold futures contract dated 05AUG2026 trades around 153135, up by 1.7% from Friday’s prices.
US FED FOMC Meeting
Meanwhile, the Federal Reserve’s interest rate decision is expected on Wednesday. In its first policy meeting under new chair Kevin Warsh, the US Fed is expected to keep rates unchanged. Similarly, the Reserve Bank of Australia is likely to keep its policy steady, and the Bank of England looks set to hold interest rates at 3.75% on Thursday.
The European Central Bank raised interest rates for the first time in nearly three years last week, while the Bank of Japan is likely to raise rates to support its currency.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Readers are strongly advised to consult a SEBI-registered investment advisor or qualified financial professional before making any gold or silver investment decisions. Financial Express is not responsible for any decisions made based on this information.
