Market Overview

On Monday, spot gold increased 0.8% to settle at $4,191.43 per ounce, while the near‑month gold futures contract slipped 0.9% to $4,209.70 per ounce. Silver rose 0.3% to $65.1065 per ounce, platinum gained 0.6% to $1,677.65 per ounce, and benchmark copper on the London Metal Exchange fell 0.7% to $13,595 per tonne; U.S. copper futures rose 0.5% to $6.3678 per pound.

Federal Reserve Outlook

The Federal Reserve released a more hawkish Summary of Economic Projections (SEP) than markets expected. The updated dot‑plot now shows at least half of the Federal Open Market Committee members anticipating one or more 25‑basis‑point rate hikes in 2026, reversing a prior outlook that projected at least two quarter‑point cuts. Bank of America analysts indicated they no longer expect any Fed rate cuts until 2028. New Fed Chair Kevin Warsh announced the formation of five task forces to examine core monetary‑policy operations. Market participants, including David Morrison, senior market analyst at Trade Nation, noted that the market has priced in a high probability of a rate increase later this year, which is pressuring gold, though speculative buying could still push prices higher, with a support level near $4,000.

Geopolitical Developments and Sentiment

Progress in U.S.–Iran peace negotiations in Switzerland lifted risk sentiment. President Donald Trump signed a memorandum of understanding with Iran during a G7 visit to France, calling for an immediate cease‑fire on all fronts, including Lebanon, and initiating a 60‑day negotiation window. The Strait of Hormuz was declared open without tolls for this period, and Iran pledged not to pursue nuclear weapons, agreeing to dispose of enriched material through a mutually‑agreed mechanism.

However, the interim understanding faced setbacks after renewed fighting between Israel and Iran‑backed Hezbollah in Lebanon, prompting Tehran to temporarily close the strait again. President Trump warned Iran to stop its proxies in Lebanon, threatening a harsher response.

Subsequent talks at Lake Lucerne in Switzerland, mediated by Qatar and Pakistan, resulted in a statement from U.S. Vice President J.D. Vance highlighting four negotiated accomplishments, the primary one being a mechanism to keep the Strait of Hormuz open.

Commodity Price Impact

The combination of a stronger U.S. dollar and the Fed’s hawkish stance weighed on gold, while the optimism from the peace talks provided a counterbalancing boost. Oil prices continued their multi‑week decline following the U.S. announcement of progress in the talks and the reopening of the Strait of Hormuz.

Summary of Key Figures

  • Spot gold: $4,191.43/oz (+0.8%)
  • Gold futures: $4,209.70/oz (‑0.9%)
  • Silver: $65.1065/oz (+0.3%)
  • Platinum: $1,677.65/oz (+0.6%)
  • LME copper: $13,595/ton (‑0.7%)
  • U.S. copper: $6.3678/lb (+0.5%)
  • Fed SEP: at least one 25‑bp hike in 2026, shifting from prior cut expectations
  • 60‑day cease‑fire period under the U.S.–Iran MoU