Trump-Zelensky Meeting Shows Progress

Markets were cautious as talks around reaching a peace deal in Ukraine show progress following the Trump-Zelensky meeting, as a resolution doesn't seem as quick as initially hoped.

Key Takeaways From Ukraine Talks

• Markets are showing cautious optimism after positive talks between US, EU and Ukraine leaders at the start of the week and ahead of the Jackson Hole Symposium.
• Crude prices declined while gold remained relatively stable in the immediate aftermath of the meetings—defence stocks in Europe fell.
• Focus now shifts to a potential bilateral or trilateral meeting between the Presidents of Russia and Ukraine, which could be the pivotal moment for achieving peace.

Growing Chances of Peace

Markets were shaky on Tuesday as investors faced a series of risk events this week. , as there were growing hopes of a breakthrough to reach a peace deal in Ukraine. Defence firms retreated, with Rheinmetall falling 4.7% and Talles losing 4.1% as traders digested the complex logistics of ending the 3-year war on Europe's eastern border. US President Donald Trump hosted EU leaders who came to support Ukrainian President Volodymyr Zelensky, with the outcome providing a positive tone, though no agreement has been made yet. The next step in the process seems to hinge on a meeting between Zelensky and his Russian counterpart, Vladimir Putin, which could happen within a couple of weeks.

The meeting did not change the main issues with the conflict, but European leaders succeeded in supporting Ukraine. to provide "Article 5-like security guarantees" to Ukraine, while Zelensky said that territorial changes were possible. The issue of a ceasefire or reaching a permanent peace agreement remained in the air. Trump had previously pushed for an immediate cessation of hostilities but changed his tone following the meeting with Putin in Alaska. The onus now shifts to a potential bilateral or trilateral meeting between Zelensky and Putin, with Trump potentially offering to be a dealmaker. The encounter would be a make-or-break event in securing peace for Ukraine. White House officials have yet to set a date but are reportedly looking to arrange the meeting in either Hungary or Switzerland.

Markets Are Cautiously Optimistic

, with Brent down 0.7% and below $66 per barrel. WTI fell even further at -1.2% to below $63.00. A peace deal could lead to an easing of Russian sanctions, which could increase global oil supplies. The price of gold was relatively stable in the aftermath of the meeting, as the market had other, more immediate risk events. Those include the Jackson Hole Symposium at the end of the week, where traders are looking for confirmation that the Fed will go through with a rate cut at the September meeting.

Momentum for Gold Still Downward

Gold prices are lower than they were at the start of the week as traders balance out positive news on the geopolitical front against the risk of a hawkish commentary from Fed officials towards the end of the week. RSI is still above 30, suggesting there could be more room for a downward move, as a potential triangle pattern could be incomplete. The yellow metal could find support at the round $3300 handle before heading to the latest swing low at $3275. A turn to the upside could find resistance at $3370, a minor top formed just ahead of the start of Ukraine peace talks. The next resistance level is at the August high at $3400.

Source: SpreadEx | Gold, Spot