Gold Market Reaction

At 14:50 ET (18:50 GMT) spot gold surged 2.4% to $4,169.42 per ounce, rebounding from a six‑month low earlier in the session. Gold futures also climbed, up 1.4% to $4,189.72 per ounce.

Oil Price Decline

Brent crude slipped 0.04%, while U.S. crude (CL) dropped 3.93% as market participants priced in the de‑escalation following President Donald Trump’s announcement.

President Trump’s Statement

Trump posted on Truth Social that, after discussions with Iran’s highest leadership and approval by all parties—including the United States, Israel, Saudi Arabia, UAE, Qatar, Turkey, Pakistan, Bahrain, Kuwait, Jordan, Egypt and others—he canceled the scheduled strikes and bombings against Iran. He added that the naval blockade would remain in force until a final transaction is signed, with the signing time and place to be announced shortly.

Context of the Geopolitical Tension

Earlier, Trump had threatened to hit Iran’s Kharg Island, the main terminal for the country’s crude exports, and to seize “total control” of Iran’s oil and gas markets. The U.S. Central Command later said the United States struck multiple Iranian military targets in self‑defence after an American helicopter was downed near the Strait of Hormuz. Iran reportedly retaliated by striking several U.S. bases and allies in the Gulf and claimed to have blocked all ship traffic through the Strait, a claim CENTCOM denied.

US Economic Data Impact

Separately, U.S. inflation data kept attention on the commodities market. The Bureau of Labor Statistics reported that headline Producer Price Index (PPI) rose 1.1% month‑over‑month and 6.5% year‑over‑year, beating consensus estimates of 0.7% and 6.4%. Core PPI increased 0.4% month‑over‑month and 4.9% year‑over‑year, versus expectations of 0.5% and 5.4%.

Federal Reserve Outlook

The first Federal Reserve rate decision under new Chair Kevin Warsh is scheduled for June 17. Market participants are pricing in two rate hikes in the back half of the year, reflecting the hotter‑than‑expected PPI and CPI data. KPMG U.S. chief economist Diane Swonk noted that inflation appears stickier ahead of the conflict, and that the data are moving the Fed toward a hike, with expectations of two hikes later in the year.

Contributors

The article was contributed by Ayushman Ojha and Scott Kanowsky.