Gold reclaims $4,300 as US-Iran peace deal lifts mining stocks

Gold surged above $4,300 an ounce and Hong Kong-listed miners rallied after the US and Iran finalized a peace agreement.

Gold rose above $4,300 an ounce, up more than 2%, after the US and Iran finalized a peace memorandum to end the Gulf conflict.

"The most immediate implication is a repricing of the inflation risk premium that markets have been carrying since the Strait closed," Billy Leung, investment strategist at Global X ETFs, said.

Spot gold traded at $4,302.19 an ounce during Asian hours Monday, after closing Friday at $4,216.83. The US dollar index weakened 0.32% to 99.483 and the 10-year Treasury yield fell 5 basis points to 4.423%. US crude oil for July delivery dropped 4.77% to $80.83 a barrel.

The agreement, set to be signed June 19, includes the unfreezing of $25 billion in Iranian assets and the reopening of the Strait of Hormuz. Gold's resilience despite the risk-on shift suggests lingering skepticism, with the Federal Reserve's June 16-17 meeting the next catalyst.

Hong Kong-listed gold miners posted sharp gains. Zijin Mining (02899.HK) rose 7.64% to HK$33.80, while Zijin Gold International (02259.HK) surged 11.36%. Lingbao Gold (03330.HK) gained 5.92% and Zhaojin Mining (01818.HK) advanced 7.09%. Short-selling ratios remained elevated, with Zijin Mining at 22.6% of turnover.

Non-ferrous metal stocks also rallied. CMOC Group (03993.HK) climbed 7.34% to HK$20.18, China Mining (01258.HK) jumped 9.84%, MMG (01208.HK) rose 8.72% and Jiangxi Copper (00358.HK) added 7.12%. HSBC raised its 2026-2028 copper price forecasts by 3% to 7%, citing sustained strength.

Skepticism Lingers Despite Risk-On Rally

While Asian equities surged — South Korea's Kospi jumping 5.1% and Japan's Nikkei 225 climbing 3.6% — gold held above $4,300. "In a clean risk-on trade, gold should be selling off as the geopolitical premium unwinds, but it is holding bid around $4,300, which tells you the market is not fully trusting the deal yet," Leung said.

The memorandum calls for an immediate ceasefire starting June 15, with formal signing on June 19. The Strait of Hormuz will reopen and the US naval blockade will be lifted, restoring oil flows disrupted since February.

Fed Meeting Adds Uncertainty

The Federal Reserve's two-day meeting beginning June 16 will be Chair Walsh's first. Markets expect rates unchanged at 3.5% to 3.75%, though traders price a 57% probability of a rate hike before December after US consumer inflation breached 4% in May. Lower oil prices could ease inflation pressures, potentially reducing the need for further tightening.

Gold at $4,302 is about 2% above its 50-day moving average but below the all-time high of $4,420 set in April. UBS has warned that a delayed Fed rate cut could push gold to the $3,850 to $4,000 range.

This article is for informational purposes only and does not constitute investment advice.