Gold ticks up in Asia as energy-truce trade takes hold, though support is fragile

The main transmission channel from this conflict to gold has run through crude, not haven buying; when tensions rise, energy costs and the case for Fed tightening gain, and that lifts yields plus the dollar, leaving bullion under pressure.

On that logic, a genuine energy truce would be positive for bullion. But this truce was disputed within hours and has not been confirmed by Moscow, making any rally built on it fragile.

If the arrangement falls apart, Ukrainian attacks on Russian refineries would probably resume, squeezing diesel supply and adding to the inflation pressure that has weighed on the metal.

Far bigger influences are Wednesday's US CPI release and attacks around the Gulf, both of which sway crude prices much more sharply.

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Gold's wartime arithmetic is straightforward: cheaper crude is supportive, and a ceasefire ought to help — just not one that was called into question before the day ended.

Summary:

• Gold ticked up in Asia on Monday, with market chatter linking the move to a Russia-Ukraine energy ceasefire announced by Trump.
• Zelenskyy said Russia struck the CHP-5 plant in Kharkiv and a Kyiv facility hours after Sunday's truce announcement.
• Moscow has stayed silent, and neither government appears to have publicly confirmed the terms ahead of Trump's statement.
• Kyiv has said it will stop striking Russian energy infrastructure if Moscow reciprocates.
• Earlier Trump-mediated energy pauses, in spring 2025 and earlier this year, did not hold.
• Wednesday's US consumer price data and Friday's remarks by Fed Chair Kevin Warsh probably carry more weight for gold.

Bullion rose during Monday's Asian session, holding above $4,200 an ounce, as market talk attributed the gain to Donald Trump's announcement of an energy ceasefire between Russia and Ukraine. The story, however, is brittle: Kyiv reported Russian strikes on Ukrainian power plants within hours of the announcement, and the Kremlin has still not said whether it accepted the deal.

Trump said on Sunday that both governments had committed to an immediate stop to strikes on energy infrastructure. Later that evening, Ukrainian officials reported that Russia struck Kharkiv's CHP-5 thermal power plant; a local official told ABC News the site was struck at least twice and caught fire. President Volodymyr Zelenskyy said a Kyiv plant was also targeted, and that Russian strikes on Ukraine's power generation and transmission had exceeded 200 in the past week. As of this writing, the Kremlin had made no comment, and Ukrainian officials said they learned of the agreement from Trump's social media post.

Zelenskyy voiced support for the truce, saying Ukraine would refrain from hitting Russian energy assets if Russia followed suit. Comparable deals have collapsed previously: a 30-day pause Trump brokered in spring 2025 quickly fell apart, and a week-long suspension of strikes on Kyiv's energy network gave way to renewed assaults on February 1 this year.

The truce's relevance to gold is via energy prices, not safe-haven flows. During the Iran conflict, each escalation has generally worked against bullion: oil climbs, inflation expectations rise, expectations of additional Fed rate increases build, and that lifts yields along with the dollar. So a durable energy ceasefire would help gold by reducing fuel costs. The catch is that the latest one was questioned within hours, and a Russia-Ukraine energy halt moves crude far less than Gulf supply does.

Last week offered a preview of that dynamic. Gold gained more than 1% on Thursday, with crude easing and the dollar weaker after Trump said Washington would not strike Iran before the midterm elections. Similarly, weekend attacks on Saudi Arabia — including the Houthis' claimed hits on Aramco facilities — pose a threat to bullion if they send oil up. The metal remains about 25% below its January peak near $5,600 and has lost roughly 2% in the past month.

Later in the week, the more significant catalysts arrive. US consumer price data due Wednesday (preview one, preview two) will shape expectations for an October rate increase, and Fed Chair Kevin Warsh is due to speak early Friday. A strong inflation number would probably affect gold far more than a truce that seems to have been contested within hours of its announcement.