Financial markets staged a powerful relief rally after US President Donald Trump abruptly called off planned military strikes against Iran and declared that diplomatic discussions had reached the “highest level of Iranian leadership.” Trump later suggested that a peace agreement could be finalized as soon as this weekend, potentially leading to the reopening of the Strait of Hormuz and easing fears of a prolonged disruption to global energy supplies. Stocks surged, Dollar reversed lower, and broader risk sentiment improved sharply.
Yet beneath the market optimism, the diplomatic picture remains far less certain. Trump claimed a “very strong memorandum of understanding” is ready for signing and said all parties have effectively approved the framework. Reports indicate the proposed agreement would include a ceasefire extension, reopening of Hormuz and further negotiations over Iran’s nuclear program. However, Iranian officials have publicly pushed back against the suggestion that a final deal has been reached. Foreign Ministry spokesman Esmaeil Baghaei described reports of a finalized agreement as premature, while Iranian media noted that similar declarations of imminent breakthroughs have surfaced repeatedly over recent months. A draft framework may exist, but Tehran has made clear that final approval has not yet been granted.
Gold and Silver responded positively to the sharp improvement in market sentiment, rebounding after testing critical long-term make or break support zones. Gold fell as low as 4,023.57 earlier this week, breaking below the March low at 4,098.45 before finding buyers near an important support cluster around the 4,000 area. That zone includes 38.2% retracement of 1,614.60 to 5,598.38 at 4,076.57, along with structural support at 3,997.73. The successful defense of this region has significantly reduced immediate downside pressure.
Attention now shifts to whether the rebound can evolve into a more meaningful reversal. For Gold, the key level is the 4,354-4,366 resistance zone, which combines 38.2% retracement of 4,889.24 to 4,023.57 at 4,354.25 and former support turned resistance at 4,366.22. A decisive break would argue that a short-term bottom has already formed and that the recent selloff has run its course.
However, rejection at 4,354-4,366 will keep near term outlook bearish. In this case, risk will remain on the downside for pushing through 4,000 to extend the down trend from 5,598.38 record high.
Silver tells a similar story. Prices rebounded after reaching 61.46, narrowly avoiding a test of the March low at 60.97 while also defending the important psychological 60 level. The metal has since stabilized, but confirmation of a bottom remains absent.
The next hurdle for Silver lies at 71.75 cluster resistance, with 38.2% retracement of 89.37 to 61.46 at 72.12. Sustained break through that region would strongly suggest that the decline from 89.37 has completed and that a durable base has formed around 60.
However, rejection there would leave downside risks intact and raise the possibility of a fresh move below 60, extending the broader correction from the record high at 121.83.
For now, markets are celebrating the reduced probability of immediate military escalation. Whether that optimism proves justified depends on events in Tehran as much as events in Washington. The risk of a weekend bombing campaign may have fallen sharply, but until signatures appear on a final agreement, both the diplomatic process and the technical recoveries in Gold and Silver remain works in progress.
