Is a US-Iran deal within reach, and is it time to bottom-fish gold?
As the US-Iran ceasefire negotiations enter their final phase, the core logic that previously suppressed gold prices is reversing, and the window for allocating gold may have quietly opened.
On the 14th, the US and Iran announced that they had reached a memorandum of understanding for a ceasefire. US President Trump said on social media that the Strait of Hormuz will be reopened after the memorandum is signed on the 19th. Boosted by this news, oil prices plunged 5% on Monday, and spot gold rebounded strongly by 3%.
In a report released on June 15 by Shenwan Hongyuan Securities Research Institute, it was pointed out that the implied volatility of gold has fallen to historic lows, and gold currently has good allocation value.
The agency’s quantitative model indicates that if central banks and ETFs maintain their current gold purchasing strength until 2026, the gold price midpoint may reach $4,767/oz within the year; in an optimistic scenario it could touch $5,416/oz; even under cautious assumptions, there is strong support around $4,250/oz.
Triple pressures combined, gold prices stepped down three times within the year
After hitting a record high of $5,626.8/oz in January 2026, gold immediately entered a sustained adjustment, experiencing three rounds of stepwise declines within the year. As of last Thursday, gold prices have fallen more than 20% from the March high, entering a technical bear market for the first time in four years.
Shenwan Hongyuan Research attributes this decline to the resonance of three pressures.
The first pressure comes from the sudden reversal of expectations on US Federal Reserve monetary policy.
After the US-Iran conflict broke out, oil prices surged sharply, combined with US non-farm payrolls far exceeding expectations in May. Market expectations for the Federal Reserve quickly shifted from 'rate cuts within the year' to 'rate hike trades', with CME rate futures showing a significant increase in the probability of a rate hike in December. The cost of holding gold rose, directly suppressing gold prices. The market currently expects the Fed to raise rates once in December 2026.
The second pressure comes from technical chain reactions.
When gold prices broke below the 200-day moving average (around $4,300), it triggered systematic fund and momentum trader quant stop-losses, trend strategies reductions, and leveraged liquidations. The 'crowd selling crowd' created a negative cycle, accelerating gold’s downward movement.
The third pressure comes from the disruption of central bank gold purchasing logic.
After oil prices surged, high energy import-dependent countries like Turkey, India, and Russia were forced to sell gold reserves to maintain foreign exchange reserves. Global central banks switched from net buying to net selling, challenging the logic of gold purchases. Notably, during this period, China’s central bank did not suspend gold purchases and continued to increase its holdings.
Source of pressure dissipates, allocation window gradually opens
Shenwan Hongyuan Research points out that the core root of the above three pressures lies in the rise in oil prices triggered by the US-Iran conflict, so the dissipation of downward pressure on gold prices also relies on this.
As negotiations progress, oil prices have clearly fallen from their highs.
The backwardation structure for crude oil futures has narrowed sharply, and the near-month contract premium over far-month contracts has returned from historical highs to the level at the beginning of March this year, showing that short-term supply tightness has eased significantly. Attention needs to be paid to two key nodes: first, whether the Strait of Hormuz will be fully opened following the signing of the agreement; second, whether oil prices can achieve a systematic downward shift in the context of short-term low inventories.
According to quantitative indicators, technical signals in the current gold market have clearly improved. COMEX gold RSI has fallen to 35.67, moving average deviation is at an extremely low historical 1.7% percentile, and the Shanghai gold moving average deviation is even lower at the 0.2% percentile, both pointing to oversold status.
Gold ETF implied volatility has also fallen to low levels, and the historical percentile of the put-call ratio trading volume has risen to 86.4%, indicating that market pessimism has been fully released.
ETF outflow pressure remains, downside has measurable space
Although allocation value is highlighted, Shenwan Hongyuan Research also notes that continued outflows from gold ETFs remain a potential pressure not to be ignored.
Referring to the period when the Fed paused rate cuts from 2019 to 2020, the SPDR gold ETF reserve fell from a peak of 1,279 tons to a low of 974 tons, dropping by 305 tons, a decline of 24%. The current SPDR gold ETF reserve has already fallen by 81 tons from its peak, a decline of about 7%, and the outflow process is not yet finished.
Based on this, the agency estimates the worst pricing under two scenarios:
If calculated according to the absolute tonnage decrease from the previous round (305 tons), there is about 224 tons of outflow space remaining. The worst-case price would be about $3,892/oz;
If calculated according to the percentage decrease (24%), there is about 100 tons of outflow space remaining. The worst-case price would be about $4,250/oz.
The latter matches closely with the support level under cautious assumptions in the quantitative model, meaning the area around $4,250 may be a strong price floor range.
Quantitative model anchors the midpoint, multi-scenario calculations provide reference
Shenwan Hongyuan Research has incorporated the factor of global gold ETF size changes into its original quantitative framework, and the updated model’s explanatory power for gold prices has significantly improved.
The core pricing factors for gold since 2022 include: global central bank gold reserves, US fiscal deficit ratio, US economic policy uncertainty, 10-year US Treasury real yields, and gold ETF size changes.
Based on this framework, the report provides three scenario forecasts:
In the baseline scenario (central banks and ETFs maintain current gold purchase strength), the 2026 gold price midpoint is about $4,767/oz;
In the optimistic scenario (central banks and ETF gold purchases both accelerate), the price could reach $5,416/oz;
In the cautious scenario (central bank gold purchase negative growth plus ETF net outflow), there is still strong support near $4,250/oz.
The agency additionally cautions that the above forecasts face multiple risks: short-term asset price fluctuations may not represent long-term trends; if the US and European economies experience deep recession, market panic could intensify price fluctuations; and if US policy direction changes significantly during Trump’s tenure, these assessments may be disrupted.
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