XAU/USD rises 1.3% as the US Dollar Index drops 0.32% on reports of a potential US-Iran ceasefire and Hormuz reopening.
Gold prices surged over 1.3% to $4,570 on Monday, recovering from daily lows of $4,519, as the US Dollar weakened amid thin trading due to the US Memorial Day holiday. The XAU/USD rally was driven by a softer Dollar, offsetting reduced liquidity in holiday markets.
The US Dollar Index (DXY) fell 0.32% to near 99.00, pressured by geopolitical developments. Reports indicated a potential 60-day ceasefire between the US and Iran, with Iran agreeing to reopen the Strait of Hormuz and clear mines within 30 days. WTI crude oil dropped more than 6% to $91.00 per barrel on the news.
US equity futures reached new all-time highs, further supporting risk sentiment. The deal, pending approval from Iran’s Supreme Leader, could ease sanctions and resume nuclear talks, reducing expectations for Federal Reserve rate hikes in 2026.