Risk-premium cools, momentum pauses: markets weigh ceasefire and shutdown

• Markets trade with caution despite ceasefire deal
• Gold buyers re-emerge just below $4,000

The rally in markets has run out of steam this week despite positive headlines coming from the Middle East about a ceasefire deal between Hamas and Israel going into effect on Friday. The restraint isn’t entirely surprising: these deals often lack a meaningful follow-through, US equities are stretched after a powerful run, and with key releases delayed by the government shutdown, there’s less fresh macro to justify pushing higher. By contrast, Europe and Asia have led this week’s gains as domestic catalysts lifted sentiment—another reminder that leadership is rotating rather than broadening.

The ceasefire impact is clearer in commodities: oil and gold have slipped on the headline relief. For bullion, the long-term tailwinds haven’t changed, but after weeks of testing overbought territory, the market was primed for a pullback. Dip-buyers re-emerged around $3,945, keeping the $4,000 area well defended for now—consistent with investors treating the ceasefire as tentative rather than definitive. One near-term headwind to watch is dollar firmness; a stronger USD can cap the upside in gold even if the macro backdrop remains supportive.

US dollar index (DXY) daily chart

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