Gold firms, oil slumps as Trump pauses Iran strikes; bullion hits seven-week high

Gold prices climbed for a fourth consecutive session as oil tumbled, after President Donald Trump halted strikes against Iran and said the United States would hold off provided a deal comes together "rapidly." The shift pushed bullion to its highest level in seven weeks while crude suffered its sharpest sell-off since the conflict escalated.

Spot gold rose 1% to $4,285.84 an ounce, its highest since June 18, according to multiple reports. On the Multi Commodity Exchange of India, October gold futures jumped 1.35% to Rs 1,46,241 per 10 grams. In Delhi, gold surged Rs 3,800 to a seven-week high of Rs 1,53,800 per 10 grams. Silver also rallied, with global spot prices rising 4.9% to a one-month high of $62.44 an ounce.

The trigger was a series of statements from Trump and Treasury Secretary Scott Bessent. "We may have Iran deal tomorrow to open Hormuz (or we may not)," Bessent said on CNBC, according to a report. Trump told reporters Iran is "moving along very nicely" and reiterated that Iran would be "very smart" to reach a deal, while adding "we'll see what happens." The comments drove a sharp decline in oil prices that in turn supported gold by easing inflation concerns.

**Oil rout stokes gold rally**

ICE Brent settled more than 7% lower on the day, according to a report from ING. West Texas Intermediate slid as low as $76 a barrel, a separate report said. The scale of the decline came despite considerable uncertainty over whether a deal will hold. ING analysts noted the sell-off seemed "fairly overdone" given that similar episodes in the past have unraveled. "We’ve been in this situation multiple times before, only to see things unravel," the report stated, adding that Iran continues to deny negotiations are under way.

Iranian officials insist their current discussions with Oman are limited to shipping routes through the Strait of Hormuz. At the same time, reports emerged that a cargo vessel off the Omani coast was struck by an unidentified projectile, underscoring the fragile nature of the situation.

**Why gold benefited**

Lower oil prices eased some inflation concerns, offering a more supportive backdrop for bullion, according to ING. A softer U.S. dollar — which hovered near a six-week low against major currencies — and lower Treasury yields also boosted demand for the safe-haven metal. JP Morgan noted that exchange-traded fund (ETF) flows have become the key driver of gold prices after weaker demand from central banks and subdued physical buying.

The rally was broad-based. Platinum traded near its strongest level since June 17, and palladium hit its highest since June 2, data from multiple sources showed.

**Crypto and equities catch a lift**

Cryptocurrencies also edged higher. Bitcoin rose 1.19% to $63,516, Ethereum gained 2.38% to $1,888.14, and Cardano led with an 8.59% jump to $0.1891, according to a detailed market report. The same report noted that the Fear & Greed Index remained unchanged at 27 — still in "Fear" territory — even as prices lifted. "The fear gauge never got the message," it added.

Equity futures also rallied. S&P 500 futures rose to an all-time high of 7,655, up 0.4%, and Nasdaq futures gained 1.1% in pre-market trading, one report said. The positive sentiment followed strong corporate earnings and optimism that a de-escalation could reduce a key tail risk.

**Analyst caution prevails**

Despite the sharp moves, several analysts struck a cautious tone. Independent metals trader Tai Wong said stronger gains across precious metals would likely require markets to begin pricing in interest rate cuts, which he said are unlikely before 2027. ING cautioned that the oil sell-off may prove temporary, as "the backdrop clearly leaves ample room for a renewed escalation" if Trump's deal deadline passes without results.

The Reserve Bank of India's decision to keep its repo rate unchanged at 5.25% and its projection that inflation will peak in the third quarter also kept traders focused on safe-haven assets, according to one domestic report.

The contradiction between asset prices and still-elevated fear gauges suggests investors are pricing a favorable outcome but remain on guard for renewed volatility. The single biggest tail risk on the tape — a barrel aimed at Iran's energy sites — has been defused for now, but as one analyst put it: "Fear didn't get the memo."