What a difference a week makes. Seven days ago, gold sat at a seven-month low near $4,070, battered by war, hot inflation, and rate hike fears, with analysts publishing year-end targets as low as $3,816. Today, Wednesday June 17, gold trades at approximately $4,349 — up 3.6% on the week — and faces the Federal Reserve’s decision with something it has not had in months: the wind at its back. The transformation came from a single event that changed everything: the US-Iran peace deal.
The peace deal, reached over the weekend, reopened the Strait of Hormuz and sent oil to a two-month low. For the gold market, this was the removal of the single force that had suppressed the price since February. The chain that held gold down — Hormuz closed, oil high, inflation high, Fed hawkish, dollar strong — is now running in reverse. Hormuz reopens, oil falls, and the inflation that forced the Fed’s hand is set to fade. Gold rallied three consecutive sessions on this realisation.
Today’s Fed decision is the first major test of the new environment. The Fed is expected to hold rates at 3.50% to 3.75% — a near certainty at 97% probability. The focus is the dot plot, where officials will likely remove the rate cut they had projected back in March, given May’s hot 4.2% inflation reading. New Chair Kevin Warsh holds his first press conference at 2:30 PM. The key question for gold: does the Fed acknowledge that the peace deal and falling oil change the inflation outlook? If Warsh signals awareness that energy-driven inflation is about to fade, gold gets another tailwind. If he stays rigidly hawkish, gold may consolidate before resuming its climb.
But step back from today’s single event and consider the structural picture, which is what truly matters for long-term holders. Central banks bought a net 244 tonnes of gold in Q1 2026, then resumed buying in April with another 17 tonnes. China has added to its reserves for 17 to 18 consecutive months. The World Gold Council’s 2026 survey found 45% of central banks plan to increase their gold reserves over the next 12 months, and 89% expect global gold reserves to keep rising. The US national debt stands near $39 trillion, with annual interest payments crossing $1 trillion this year. No Fed decision and no peace deal changes those numbers — they are the deep roots that have driven gold’s bull market for years.
The tree fell to a seven-month low a week ago. The peace deal was the rain that revived it. Today it faces the Fed standing taller than it has in weeks. Every major bank’s year-end target — Goldman Sachs $5,400, J.P. Morgan near $6,000, Morgan Stanley $5,200, UBS $5,500 — sits 20% to 38% above today’s price. The roots run deep. The storm has passed.
