Support
Gold rebounds above $4,900 as trade deal with India and Iran talks ease pressure
Gold staged a sharp rebound after two days of heavy selling, supported by bargain hunting and a partial easing in geopolitical and trade tensions, even as uncertainty lingers ahead of key US economic data delayed by the government shutdown.
Gold rebounds more than 5% after the steepest selloff in over a decade
US–India trade deal eases tariff tensions and reshapes energy flows
Prospects of US–Iran talks reduce immediate geopolitical risk
Fed leadership uncertainty and delayed US data keep volatility elevated
Gold finds buyers after brutal selloff
Gold surged more than 5% on Tuesday to trade above $4,900 an ounce, as investors stepped in after two consecutive sessions of aggressive selling. The precious metal had fallen nearly 5% the previous day, extending Friday’s rout that marked its sharpest decline in more than ten years.
The initial selloff was triggered by news that US President Donald Trump plans to nominate Kevin Warsh as the next chair of the Federal Reserve. Warsh is widely seen as more hawkish than other potential candidates, fueling expectations of tighter monetary policy and strengthening the dollar at the expense of gold.
US–India trade deal reshapes market mood
Sentiment improved after Washington and New Delhi reached a breakthrough trade agreement, easing months of friction between the two countries. Under the deal, India committed to halting purchases of Russian oil, while cutting tariffs on US goods to zero. In return, the US reduced tariffs on Indian exports to 18%.
The agreement also includes a pledge by India to purchase $500 billion worth of US products over time, a move seen as strategically significant for trade flows and energy markets. The easing of tariff pressure helped calm broader market nerves, supporting a rebound across risk-sensitive assets, including precious metals.
Iran talks add to geopolitical relief
Adding to the more constructive backdrop, Trump said he expects talks with Iran over a potential new nuclear deal in the coming days. Senior officials from both sides are set to meet on Friday, aiming to de-escalate tensions that have weighed on markets.
While negotiations remain uncertain, even the prospect of dialogue reduced near-term geopolitical risk premiums, contributing to the recovery in gold after last week’s panic-driven liquidation.
Fed uncertainty and data gaps keep volatility high
Despite the rebound, uncertainty remains elevated. Warsh’s nomination still faces a political hurdle, with Senator Thom Tillis maintaining a block on progress. Treasury Secretary Scott Bessent praised Warsh as “off to a great start,” citing his credibility, but confirmation remains unresolved.
Meanwhile, key US labor market data, including the closely watched non-farm payrolls report, will not be released this week due to the partial government shutdown. The absence of fresh economic signals leaves markets navigating policy headlines and geopolitical developments with limited macro guidance.
For now, gold’s rebound reflects short-term relief rather than clarity, with traders balancing easing trade and geopolitical tensions against lingering uncertainty over Federal Reserve leadership and the path of US monetary policy.
