Israel approves the Gaza ceasefire agreement, geopolitical risk premium declines, oil and gold prices may fall
2025-10-10 10:01:22
The Israeli government on Friday approved a ceasefire agreement with the Palestinian militant group Hamas, paving the way for a 24-hour suspension of hostilities in Gaza and the release of Israeli hostages held in Gaza within 72 hours.
President Donald Trump announced Thursday that Israel and Hamas had "agreed" to the first phase of a peace plan for the Gaza Strip following negotiations in the Egyptian Red Sea city of Sharm el-Sheikh. The Israeli government approved the agreement on Friday, officially putting the ceasefire into effect.
Under the phase one deal, all remaining hostages will be released from Gaza, some Palestinian prisoners will be freed from Israeli jails, and the IDF will partially withdraw from the coastal strip. Trump called the agreement "the first step toward a strong, lasting, and everlasting peace."
Israel's cabinet approved the deal in the early hours of Friday, about 24 hours after mediators announced the agreement.
Israeli Prime Minister Benjamin Netanyahu posted on social media platform X: "The government has just approved the release of all hostages - both the living and the dead."
Hamas's Gaza leader, Haya, said he had received assurances from the United States and other mediators that the conflict would end.
An Israeli government spokesman said the ceasefire would take effect within 24 hours of the government's approval of the agreement, and that hostages held in Gaza would be released within 72 hours.
If the agreement is fully implemented, it will bring both sides one step closer to ending the war.
But uncertainties remain. After the agreement was signed, a Palestinian source stated that the list of Palestinians to be released had not yet been finalized. Other steps in Trump's 20-point plan remain to be discussed, including the post-war governance arrangements for Gaza and the ultimate fate of Hamas.
Trump said he would travel to the Middle East this Sunday and might attend a signing ceremony in Egypt. Israeli Knesset Speaker Ohana invited him to address the Knesset. If successful, he would be the first US president to address the Knesset since 2008. Trump said he hoped the agreement would bring "permanent peace" to the region.
The United States will deploy 200 troops as part of a joint joint task force to stabilize Gaza, but no US troops will enter the Gaza Strip. The specific location of the deployment has not yet been determined, two senior US officials said on Thursday.
Geopolitical risk premium weakens, putting oil prices under short-term pressure
At the outset of the conflict, market concerns arose that the fighting could spread to the wider Middle East, encompassing major oil-producing countries (particularly Iran), disrupting global crude oil supplies. This concern injected a significant "geopolitical risk premium" into oil prices. With the conclusion and implementation of the ceasefire agreement, the risk of a regional war has significantly decreased, and this premium is being squeezed out of oil prices, exerting clear bearish pressure on international oil prices (particularly Brent crude) in the short term. The oil market reacted significantly on Thursday, with US crude oil falling 1.25%. On Friday, prices remained fluctuating around a low of $61.60 per barrel.
As the threat of supply disruptions eases, market focus returns to fundamentals
The agreement significantly reduces expectations of potential threats to key crude oil shipping routes, such as the Strait of Hormuz. As tensions de-escalate, market attention will shift from geopolitics to global crude oil market fundamentals, including OPEC+'s implementation of production increases, US shale oil production, and the demand outlook driven by global economic growth. Against the backdrop of current inventory levels and uncertain demand growth, the fading risk premium could amplify downward momentum in oil prices.
Uncertainty persists, limiting oil price declines
Despite the ceasefire, the agreement remains uncertain: the list of prisoners to be released has not been finalized, and thorny issues such as post-war Gaza governance and the fate of Hamas remain unresolved. Furthermore, the deployment of US troops for peacekeeping and Trump's high-profile intervention mean the situation in the region remains fragile. Any subsequent breakdown in the agreement or resurgence of localized conflict could quickly reverse market optimism and push oil prices higher again. Therefore, the downside potential for oil prices will be limited by these potential risks.
Safe-haven demand fades, exerting downward pressure
As a traditional safe-haven asset, gold often attracts capital inflows during periods of heightened regional conflict and uncertainty. The ceasefire agreement significantly reduced the geopolitical risk premium, potentially triggering profit-taking in the gold market and exerting downward pressure on gold prices in the short term. Gold prices fell on Thursday, reversing Wednesday's gains and dropping nearly 2%. On Friday, gold prices fluctuated around $3,980 per ounce.
If the agreement is implemented smoothly, it will greatly boost market risk appetite, and funds may rotate from safe-haven assets such as gold to risky assets such as stocks, weakening gold's short-term attractiveness.
Uncertainty remains, providing potential support
Key issues such as post-war governance in Gaza and the fate of Hamas remain to be discussed. Any delays or disagreements in implementation could lead to renewed tensions, providing support for gold prices.
The agreement has only resolved the first phase of the problem and has not eradicated the long-standing conflicts in the region. The market will remain cautious about whether "permanent peace" can be achieved, which means that the long-term safe-haven logic of gold has not completely collapsed.
The linkage effect between the US dollar and interest rates
The easing of geopolitical risks may alleviate some of the safe-haven buying for the US dollar. If the dollar weakens as a result, this could offset some of the downward pressure on gold prices. However, the core of gold's medium- and long-term trend will still revolve around the Federal Reserve's monetary policy. If the peaceful atmosphere brought about by the ceasefire reinforces expectations of a global "soft landing," market expectations for a Fed rate cut may weaken, which would be a more lasting negative factor for gold, which does not generate interest.
At 09:58 Beijing time, U.S. crude oil continued to trade at $61.60 per barrel.
President Donald Trump announced Thursday that Israel and Hamas had "agreed" to the first phase of a peace plan for the Gaza Strip following negotiations in the Egyptian Red Sea city of Sharm el-Sheikh. The Israeli government approved the agreement on Friday, officially putting the ceasefire into effect.
Under the phase one deal, all remaining hostages will be released from Gaza, some Palestinian prisoners will be freed from Israeli jails, and the IDF will partially withdraw from the coastal strip. Trump called the agreement "the first step toward a strong, lasting, and everlasting peace."
Israel's cabinet approved the deal in the early hours of Friday, about 24 hours after mediators announced the agreement.
Israeli Prime Minister Benjamin Netanyahu posted on social media platform X: "The government has just approved the release of all hostages - both the living and the dead."
Hamas's Gaza leader, Haya, said he had received assurances from the United States and other mediators that the conflict would end.
An Israeli government spokesman said the ceasefire would take effect within 24 hours of the government's approval of the agreement, and that hostages held in Gaza would be released within 72 hours.
If the agreement is fully implemented, it will bring both sides one step closer to ending the war.
But uncertainties remain. After the agreement was signed, a Palestinian source stated that the list of Palestinians to be released had not yet been finalized. Other steps in Trump's 20-point plan remain to be discussed, including the post-war governance arrangements for Gaza and the ultimate fate of Hamas.
Trump said he would travel to the Middle East this Sunday and might attend a signing ceremony in Egypt. Israeli Knesset Speaker Ohana invited him to address the Knesset. If successful, he would be the first US president to address the Knesset since 2008. Trump said he hoped the agreement would bring "permanent peace" to the region.
The United States will deploy 200 troops as part of a joint joint task force to stabilize Gaza, but no US troops will enter the Gaza Strip. The specific location of the deployment has not yet been determined, two senior US officials said on Thursday.
Analysis of the core impact on the crude oil market
Geopolitical risk premium weakens, putting oil prices under short-term pressure
At the outset of the conflict, market concerns arose that the fighting could spread to the wider Middle East, encompassing major oil-producing countries (particularly Iran), disrupting global crude oil supplies. This concern injected a significant "geopolitical risk premium" into oil prices. With the conclusion and implementation of the ceasefire agreement, the risk of a regional war has significantly decreased, and this premium is being squeezed out of oil prices, exerting clear bearish pressure on international oil prices (particularly Brent crude) in the short term. The oil market reacted significantly on Thursday, with US crude oil falling 1.25%. On Friday, prices remained fluctuating around a low of $61.60 per barrel.
As the threat of supply disruptions eases, market focus returns to fundamentals
The agreement significantly reduces expectations of potential threats to key crude oil shipping routes, such as the Strait of Hormuz. As tensions de-escalate, market attention will shift from geopolitics to global crude oil market fundamentals, including OPEC+'s implementation of production increases, US shale oil production, and the demand outlook driven by global economic growth. Against the backdrop of current inventory levels and uncertain demand growth, the fading risk premium could amplify downward momentum in oil prices.
Uncertainty persists, limiting oil price declines
Despite the ceasefire, the agreement remains uncertain: the list of prisoners to be released has not been finalized, and thorny issues such as post-war Gaza governance and the fate of Hamas remain unresolved. Furthermore, the deployment of US troops for peacekeeping and Trump's high-profile intervention mean the situation in the region remains fragile. Any subsequent breakdown in the agreement or resurgence of localized conflict could quickly reverse market optimism and push oil prices higher again. Therefore, the downside potential for oil prices will be limited by these potential risks.
Gold's safe-haven status faces short-term test
Safe-haven demand fades, exerting downward pressure
As a traditional safe-haven asset, gold often attracts capital inflows during periods of heightened regional conflict and uncertainty. The ceasefire agreement significantly reduced the geopolitical risk premium, potentially triggering profit-taking in the gold market and exerting downward pressure on gold prices in the short term. Gold prices fell on Thursday, reversing Wednesday's gains and dropping nearly 2%. On Friday, gold prices fluctuated around $3,980 per ounce.
If the agreement is implemented smoothly, it will greatly boost market risk appetite, and funds may rotate from safe-haven assets such as gold to risky assets such as stocks, weakening gold's short-term attractiveness.
Uncertainty remains, providing potential support
Key issues such as post-war governance in Gaza and the fate of Hamas remain to be discussed. Any delays or disagreements in implementation could lead to renewed tensions, providing support for gold prices.
The agreement has only resolved the first phase of the problem and has not eradicated the long-standing conflicts in the region. The market will remain cautious about whether "permanent peace" can be achieved, which means that the long-term safe-haven logic of gold has not completely collapsed.
The linkage effect between the US dollar and interest rates
The easing of geopolitical risks may alleviate some of the safe-haven buying for the US dollar. If the dollar weakens as a result, this could offset some of the downward pressure on gold prices. However, the core of gold's medium- and long-term trend will still revolve around the Federal Reserve's monetary policy. If the peaceful atmosphere brought about by the ceasefire reinforces expectations of a global "soft landing," market expectations for a Fed rate cut may weaken, which would be a more lasting negative factor for gold, which does not generate interest.
At 09:58 Beijing time, U.S. crude oil continued to trade at $61.60 per barrel.
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