Gold retreated but remained firmly above the $4,000 threshold, as investors locked in profits following a record breaking rally and reduced exposure to haven assets after signs of progress in Middle East peace talks. Oil prices also slipped after US President Donald Trump announced a breakthrough in negotiations between Israel and Hamas, signaling a potential end to one of the region’s longest running conflicts.
Gold Cools After Historic Surge, but Safe Haven Appeal Persists
After notching unprecedented highs earlier in the week, gold eased modestly on Thursday, reflecting short term profit taking amid improving geopolitical sentiment. Even with the pullback, the precious metal continues to trade near record territory, underscoring resilient demand from investors seeking protection against policy uncertainty, fiscal instability, and lingering inflation risk.
Market participants say the short term softness does little to alter the broader trend. This is a natural consolidation after a vertical move the macro case for gold remains firmly intact,. Traders continue to see gold as a key portfolio hedge, particularly as central banks maintain accommodative stances and global fiscal risks intensify.
Oil Retreats on Middle East Peace Progress
Crude oil prices edged lower after President Trump announced that Israel and Hamas have agreed to the first phase of a peace framework, marking the most significant diplomatic progress since the outbreak of conflict in October 2023. The deal, brokered by the US and Qatar, includes the release of hostages and lays the groundwork for a gradual ceasefire.
Markets viewed the announcement as a potential de-escalation signal for energy risk premiums, with traders scaling back positions built on geopolitical tension. Still the agreement’s durability remains uncertain, and any breakdown could quickly reignite volatility across oil markets.
Dollar Eases After Strong Run, Traders Refocus on Asia
The US dollar index slipped for the first time in four sessions, pausing a rally that recently pushed it to near two month highs. The modest pullback reflects profit taking and shifting sentiment as investors digest geopolitical developments and brace for next week’s inflation data critical for shaping expectations on the Federal Reserve’s next policy move.
In Asia, attention turned sharply to China’s return from its Golden Week holiday, with markets watching closely for signs of post-holiday consumer strength and export momentum. Meanwhile, Beijing unveiled new restrictions on rare-earth exports, expanding curbs to include certain products manufactured abroad a move likely to heighten trade frictions with Washington.
SARACEN MARKETS VIEW
- Gold: The dip above $4,000 reflects profit taking rather than trend reversal. The broader macro backdrop fiscal uncertainty, Fed policy risk, and geopolitical fragmentation still supports long-term bullish sentiment.
- Oil: The Trump brokered Israel-Hamas accord could temporarily suppress risk premiums, but markets will remain cautious until there’s clear evidence of sustained de-escalation.
- FX & Asia: The dollar’s pause and China’s rare-earth export curbs introduce a fresh layer of complexity for risk assets heading into Q4.
As global markets recalibrate after weeks of high volatility, traders should remain alert to shifting geopolitical narratives and US policy uncertainty. With gold still near record highs, energy markets rebalancing, and China re-entering the trading landscape, the coming sessions are set to redefine short-term positioning across currencies, commodities, and bonds.
Disclaimer: This report is for informational purposes only. It does not constitute investment advice or represent the official views of any central bank or regulatory body.