For gold, the key channel in this conflict has been oil rather than safe-haven demand: escalation has lifted energy prices and Fed hike expectations, pushing up yields and the dollar and weighing on bullion. On that logic, a credible energy truce would be supportive, but this one was disputed within hours and has not been confirmed by Moscow, so a rally built on it rests on weak foundations. A breakdown would likely put Ukrainian strikes on Russian refineries back in play, tightening diesel supply and reinforcing the inflation pressure that has hurt gold. Wednesday’s US CPI and Gulf attacks, which move oil far more, are the stronger drivers.
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Gold’s logic in this war is simple: lower oil helps it, so a truce should too, but not one that was disputed before the day was out.
Summary:
Gold edged higher in Asian trade on Monday, with some market chatter attributing the move to Trump’s Russia-Ukraine energy ceasefire
Zelenskyy said Russia struck the CHP-5 power plant in Kharkiv and a plant in Kyiv hours after the truce was announced on Sunday
The Kremlin has not commented, and neither side appears to have publicly confirmed the terms before Trump’s announcement
Ukraine says it will stop striking Russian energy facilities if Russia does the same
Previous Trump-brokered energy pauses, in spring 2025 and earlier this year, failed to last
US CPI on Wednesday and Fed Chair Warsh’s remarks on Friday are likely to matter more for gold
Gold edged higher in Asian trade on Monday, trading above $4,200 an ounce, with some market chatter crediting the move to Donald Trump’s announcement of an energy ceasefire between Russia and Ukraine. The narrative looks fragile: within hours of the announcement, Kyiv said Russia had struck Ukrainian power plants, and Moscow has yet to say whether it agreed to the truce at all.
Trump announced on Sunday that both sides had agreed to an immediate halt to attacks on energy infrastructure. That evening, Russia struck the CHP-5 thermal power plant in Kharkiv, according to Ukrainian officials, with a local official telling ABC News it was hit at least twice and caught fire. President Volodymyr Zelenskyy said a plant in Kyiv was also targeted, and that Russia had carried out more than 200 strikes on Ukraine’s power generation and transmission over the past week. The Kremlin had not commented at the time of writing, and Ukrainian officials said they learned of the deal from Trump’s social media post.
Zelenskyy said Ukraine supports the truce and would stop striking Russian energy facilities if Russia did the same. Similar arrangements have broken down before: a 30-day moratorium brokered by Trump in spring 2025 did not last, and a week-long pause on strikes against Kyiv’s energy system ended on February 1 this year with renewed attacks.
The link between the truce and gold runs through energy prices rather than safe-haven demand. Throughout the Iran war, escalation has tended to hurt bullion by lifting oil, raising inflation expectations and strengthening the case for further Federal Reserve hikes, which pushes up yields and the dollar. On that logic, a lasting energy truce would be positive for gold by easing fuel prices. The problem is that this truce was disputed within hours, and a Russia-Ukraine energy pause is a much smaller factor for oil than supply from the Gulf.
The pattern was visible last week. Gold rose more than 1% on Thursday as oil fell and the dollar softened after Trump said the US would not attack Iran before the midterm elections. By the same token, weekend attacks on Saudi Arabia, including Houthi claims of strikes on Aramco facilities , are a risk for gold if they push crude higher. Bullion is still around 25% below its January record near $5,600 and has slipped about 2% over the past month.
The bigger tests come later in the week. US consumer price data on Wednesday ( preview one, pre view two ) will shape expectations for an October Fed hike, and Fed Chair Kevin Warsh speaks early on Friday. A firm inflation reading would likely matter far more for gold than a ceasefire that appears to have been disputed within hours of being announced.
This article was written by Eamonn Sheridan at investinglive.com.
