Gold held onto its gains after reports surfaced of a tentative US-Iran agreement that could extend the fragile ceasefire between the two nations. The deal, reportedly struck on May 28, hinges on Iran removing mines from the Strait of Hormuz within 30 days in exchange for the US lifting its naval blockade.
The metal was trading near $4,700 per ounce in late May, a level that reflects cautious optimism rather than panic. For context, gold had fallen over 10% from its highs after the US-Iran conflict erupted on February 28, as surging oil prices stoked inflation fears that made even the classic safe haven look wobbly.
From conflict to cautious calm
When the US-Iran conflict kicked off in late February, the initial reaction wasn’t a rush into bullion. It was a selloff. Rising oil prices triggered inflation concerns, and inflation, or at least the expectation of aggressive central bank responses to it, can be kryptonite for gold.
That changed in early April. An initial two-week ceasefire announced around April 7-8 sent gold spiking above $4,800 per ounce. Bitcoin, never one to miss a party, surged past $72,000 during the same window.
Multiple rounds of negotiations followed through April and May, with speculative trading volumes on platforms like Polymarket surging as traders bet on ceasefire outcomes. By late May, the mood had settled into something resembling guarded optimism, with gold pulling back slightly from its April highs but holding firm near $4,700.
The Hormuz wildcard
The key condition in the latest tentative agreement is worth paying attention to. Iran would need to remove the mines it placed in the Strait of Hormuz within 30 days. In return, the US would lift its naval blockade.
The Strait of Hormuz handles roughly a fifth of global oil flows. Mines in those waters don’t just threaten tankers. They threaten the pricing assumptions baked into everything from gasoline to airline tickets to the Fed’s inflation models.
What this means for crypto investors
Bitcoin was fluctuating between $73,000 and $81,000 in late May, a wide range that reflects the market’s inability to decide whether it’s a risk asset or a safe haven on any given day.
Both gold and Bitcoin sold off when inflation fears spiked in late February. Both rallied when the initial ceasefire was announced in April. Gold’s moves have been more directly tied to oil and inflation expectations. Bitcoin’s have been noisier, influenced by the same macro factors but also by crypto-specific flows, leverage, and the general mood on trading platforms. The Polymarket activity around ceasefire contracts suggests that crypto-native traders are paying close attention to geopolitical developments, but they’re expressing those views through prediction markets as much as through spot Bitcoin positions.
Traders should watch two things closely: any official confirmation of the mine clearance timeline, and oil price movements in the days following the announcement. If Brent crude continues to ease, it would confirm that the market is pricing in a durable peace. If oil stays elevated despite the diplomatic progress, it would suggest that traders remain skeptical.