The Israel-Hamas ceasefire has is being seen as a ‘risk-premium release value’ rather than as strategic driver for investment, according to analysis from trading platform, Capital.com.
The news comes as President Donald Trump hailed the release of all remaining Israeli hostages held by Hamas in Gaza. The release coincided with the President making a formal address Israel’s parliament, the Knesset, just as the last of Israel’s surviving hostages return home after 737 days in captivity.
Daniela Sabin Hathorn, Senior Market Analyst, Capital.com said: “Markets have treated the Israel–Hamas ceasefire as a risk-premium release valve rather than a strategic driver. The immediate reaction showed up most cleanly in energy with Brent sliding last week as the Middle East supply scare faded, with equities remaining bid through the positive news.
He continued, “One thing to consider is the deal is phased and contingent. Any snag in the hostage handovers or rocket fire flare-ups would quickly reprice premium back in. Early releases under the framework have started, but officials are cautioning that unresolved issues remain
“Meanwhile, the focus has now shifted to the US-China trade tensions which are overshadowing the ceasefire news. Equities are recovering after an overstretched selloff on Friday as markets adjusted to the realisation that trade policy uncertainty has not yet been resolved. Oil also deepens the selloff on the back of growth concerns stemming from the negative impact these potential tariffs would have on growth. Markets are hoping for another TACO trade where the tensions are eased and used mostly as a negotiating tactic when both parties (hopefully) meet later this month,” he concluded.
Further analysis from Capital.com
- 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
Past performance is not a reliable indicator of future results.
For more market insights, please visit: https://capital.com/en-gb/analysis/daniela-hathorn
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