Merrill Lynch: Gold’s Fundamental Drivers to Re-Emerge as Iran Conflict Shock Fades

Key Facts

Gold and silver prices surged on Wednesday following the official announcement of a cease-fire between the U.S. and Iran. This price action aligns with the outlook from Merrill Lynch analyst Jared Avioli, who suggested that gold's fundamental drivers would re-emerge as geopolitical shocks fade. However, Commerzbank noted that this post-ceasefire rally was primarily driven by movements in bond yields and interest rates rather than just the easing of tensions. These developments follow data showing U.S. gold exports hit a record $17.88 billion, positioning the metal as the nation's top export by value. Despite hawkish Federal Reserve (FED) sentiment and a firm US Dollar (USD), market focus is shifting back to long-term structural demand. After XAU/USD previously reached record highs of $5,100, the bank maintains that the long-term bullish trajectory remains intact as temporary disruptions settle.

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