Oil prices plummeted due to expectations of US-Iran peace talks, while gold and silver prices rebounded accordingly.
2026-05-25 23:39:48
On Monday (May 25), coinciding with the US Memorial Day holiday, global financial markets experienced significant volatility due to potential developments in the Middle East situation. International crude oil prices plummeted by over 5% as market expectations for a peace agreement between the US and Iran and the reopening of the Strait of Hormuz increased significantly. The drop in oil prices effectively alleviated pressure on energy-driven inflation, leading to a weaker dollar and a cooling of expectations for a Federal Reserve interest rate hike, which in turn caused spot gold and silver to rebound sharply. Spot gold traded at $4471.75 per ounce, up approximately 1.44%; spot silver prices surged 3.19% to $77.833 per ounce.
A glimmer of peace appears in the Strait of Hormuz as US-Iran negotiations make progress.
Tensions in the Strait of Hormuz, a crucial passage for global energy supplies, are expected to ease. US President Trump stated that negotiations with Iran are proceeding "orderly and constructively." Reports indicate that Pakistan-mediated talks have made progress on "most issues," including extending the 60-day ceasefire, reopening the strait, and lifting the maritime blockade. However, obstacles remain on nuclear programs and sanctions, and Iran's Foreign Ministry has emphasized that a final agreement is far from being achieved. Trump similarly stated that there is no need to rush things.
International oil prices plunged 5%, while global stock markets generally strengthened.
Although the agreement has not yet been finalized, the market's expectation of easing tensions has triggered a chain reaction in asset prices. International oil prices fell to a two-week low, with WTI crude futures plunging more than 5% to around $91.83 per barrel, and Brent crude also falling below the $100 mark. Driven by this, global stock markets generally strengthened, with Japan's Nikkei index surging nearly 3%, and stock indices in several European countries also rising by nearly 1%. Meanwhile, the US dollar index weakened to around 99.00, and there were no quotes for US Treasury cash trading due to a US public holiday.
The macroeconomic logic surrounding precious metals has evolved, with expectations of interest rate hikes cooling somewhat.
Previously, high oil prices exacerbated inflation concerns, and according to the CME FedWatch tool, the market had previously anticipated a near 40% probability of a Fed rate hike in December, which put continued pressure on gold, a non-interest-bearing asset. However, Monday's expectation of the Strait of Hormuz reopening eased energy inflation risks, weakening the case for further Fed rate hikes. Although the expectation of peace dampened some risk aversion, a weaker dollar, stronger non-energy commodities (such as copper), and continued central bank buying and strong investment demand continued to provide strong long-term support for precious metals, driving a counter-trend rebound in thin holiday trading.
Technical Analysis of Gold and Silver
(Spot gold daily chart source: FX678)
From a technical perspective, gold (XAU/USD) is currently holding above the 200-day moving average around $4381, indicating a bullish overall trend, but upward movement is constrained by the 100-day moving average at $4800. If the bulls can push the price above the resistance zone of $4580.80 to $4660, the next targets will be $4678 and the $5000 mark; conversely, $4500 is a crucial technical support level, and a decisive break below this level could trigger a significant pullback of approximately $800.
Silver bulls are currently targeting the resistance zone of $78.95 to $89.00, with a potential move towards $90 and $100 after a breakout; bears, on the other hand, are attempting to push prices below $76.40 to test the $72.00 support level. With the holidays over this week, investors should closely watch Thursday's US PCE inflation report and speeches by Federal Reserve officials for further clues about the interest rate path.
A glimmer of peace appears in the Strait of Hormuz as US-Iran negotiations make progress.
Tensions in the Strait of Hormuz, a crucial passage for global energy supplies, are expected to ease. US President Trump stated that negotiations with Iran are proceeding "orderly and constructively." Reports indicate that Pakistan-mediated talks have made progress on "most issues," including extending the 60-day ceasefire, reopening the strait, and lifting the maritime blockade. However, obstacles remain on nuclear programs and sanctions, and Iran's Foreign Ministry has emphasized that a final agreement is far from being achieved. Trump similarly stated that there is no need to rush things.
International oil prices plunged 5%, while global stock markets generally strengthened.
Although the agreement has not yet been finalized, the market's expectation of easing tensions has triggered a chain reaction in asset prices. International oil prices fell to a two-week low, with WTI crude futures plunging more than 5% to around $91.83 per barrel, and Brent crude also falling below the $100 mark. Driven by this, global stock markets generally strengthened, with Japan's Nikkei index surging nearly 3%, and stock indices in several European countries also rising by nearly 1%. Meanwhile, the US dollar index weakened to around 99.00, and there were no quotes for US Treasury cash trading due to a US public holiday.
The macroeconomic logic surrounding precious metals has evolved, with expectations of interest rate hikes cooling somewhat.
Previously, high oil prices exacerbated inflation concerns, and according to the CME FedWatch tool, the market had previously anticipated a near 40% probability of a Fed rate hike in December, which put continued pressure on gold, a non-interest-bearing asset. However, Monday's expectation of the Strait of Hormuz reopening eased energy inflation risks, weakening the case for further Fed rate hikes. Although the expectation of peace dampened some risk aversion, a weaker dollar, stronger non-energy commodities (such as copper), and continued central bank buying and strong investment demand continued to provide strong long-term support for precious metals, driving a counter-trend rebound in thin holiday trading.
Technical Analysis of Gold and Silver
(Spot gold daily chart source: FX678)
From a technical perspective, gold (XAU/USD) is currently holding above the 200-day moving average around $4381, indicating a bullish overall trend, but upward movement is constrained by the 100-day moving average at $4800. If the bulls can push the price above the resistance zone of $4580.80 to $4660, the next targets will be $4678 and the $5000 mark; conversely, $4500 is a crucial technical support level, and a decisive break below this level could trigger a significant pullback of approximately $800.
Silver bulls are currently targeting the resistance zone of $78.95 to $89.00, with a potential move towards $90 and $100 after a breakout; bears, on the other hand, are attempting to push prices below $76.40 to test the $72.00 support level. With the holidays over this week, investors should closely watch Thursday's US PCE inflation report and speeches by Federal Reserve officials for further clues about the interest rate path.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
