WASHINGTON (dpa-AFX) - Extending Friday's surge, gold prices have soared on Monday following a slump in crude oil prices after the U.S. and Iran announced a deal to end the gulf war and reopen the Strait of Hormuz. The official signing is set to take place on Friday in Switzerland.
Front Month Comex Gold for August month delivery has soared by $113.10 (or 2.67%) to $4,351.90 per troy ounce.
Front Month Comex Silver for August month delivery has surged by $2.221 (or 3.25%) to $70.461 per troy ounce.
Markets received a boost after Sunday's announcement, first by U.S. President Donald Trump and later by Iran's Deputy Foreign Minister Kazem Gharibabadi that the U.S. and Iran have reached a preliminary deal to end their mutual war which began after U.S.-Israeli attacks on Iran on February 28. Gharibabadi stated that Iran's commitments would commence on Friday.
Significantly, this initial agreement allows resumption of traffic through the Strait of Hormuz which was shut by Iran soon after the war commenced.
As per the framework agreement, both nations have agreed to halt all attacks for 60 days and negotiate all sticking points to arrive at a mutually agreeable settlement.
Through a post via his social media platform Truth Social, Trump stated that the deal with Iran is complete. Trump authorized the reopening of the Strait of Hormuz and lifting of the U.S. naval blockade, enforced earlier in April on all ships traveling to and from Iranian ports.
In an interview with The New York Times Trump stated that the strait would become permanently toll-free.
Echoing Trump's contention, U.S. Vice President JD Vance stated that he expected the strait to remain toll-free in the long-term when the negotiations conclude but admitted that currently there are a lot of details that remain to be ironed out though he asserted that the U.S. has all the cards.
The free flow of oil and energy transit via the crucial waterway will commence soon after the removal of all sea mines planted by Iran to ensure safe passage for ships.
Both nations are set to sign a Memorandum of Understanding on Friday in Switzerland. The Prime Minister of Pakistan, which acted as a facilitator of exchange of communications between the U.S. and Iran, stated that Pakistan will host the signing ceremony.
Iran's Foreign Ministry spokesperson Esmaeil Baghaei stated that the U.S. is obliged to implement the commitments it has agreed to failing which Iran would respond appropriately.
Israeli Defense Minister Israel Katz stated that the Israeli army will remain in the security zones in Lebanon, Syria and Gaza without any time limit for its own protection.
More contentious issues have been deferred to the upcoming negotiations.
Data released by the U.S. Federal Reserve today showed that on a month-on-month basis, industrial production increased by 0.10% in May and on a year-on-year basis by 1.70%.
Following Trump's announcement, supply disruption concerns faded and crude oil prices tumbled.
WTI crude oil for July month was last seen trading at $80.58 a barrel, down by $4.30 (or 5.07%).
The U.S. dollar index was last seen trading at 99.56, down by 0.18 points (or 0.18%) today.
The slump in crude oil and decrease in the U.S. Dollar Index pushed yellow metal prices higher.
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