Iran's 40-Day Mourning Rallies Coincide With Faltering Ceasefire

Tensions mount as Israel's continued strikes on Lebanon threaten to unravel the fragile two-week truce brokered by Pakistan

Tens of thousands of Iranians took to the streets Wednesday to mark the 40-day mourning period following the death of Supreme Leader Ali Khamenei, even as the fragile ceasefire that briefly quieted the skies over Tehran showed alarming signs of collapse.

Demonstrators carrying portraits of the late supreme leader and waving flags of the Islamic Republic gathered in cities across the country — including a massive rally in Tehran's Revolution Square, along with significant gatherings in the northwestern city of Urmia and in Gorgan in the northeast. The two-week truce, brokered by Pakistani Prime Minister Shehbaz Sharif, had halted 40 days of U.S.-Israeli strikes that pushed the region to the brink of broader war. 

The 40-day commemoration carries deep significance in Islamic tradition as a formal milestone in the mourning process. Hezbollah cited Khamenei's killing on February 28 — the opening day of the war — as justification for its continued operations, alongside what it described as near-daily Israeli violations of an earlier ceasefire agreement reached in Lebanon in November 2024. 

Yet the solemnity of the occasion was shadowed by the rapid unraveling of the peace framework announced less than 48 hours earlier.

A Ceasefire Under Siege

President Trump announced the agreement on his Truth Social platform, describing Iran's 10-point proposal as "a workable basis on which to negotiate" and stating that "almost all of the various points of past contention" had been resolved, with the two-week window allowing time to finalize a broader accord. 

Markets initially embraced the news. Crude oil prices dropped below $100 a barrel, and stock markets in Asia and Europe soared on hopes that the conflict — which had choked global shipping through the Strait of Hormuz — was moving toward resolution. 

But the optimism proved short-lived.

Israel launched what it described as its largest strikes on Beirut since the war began, hitting more than 100 Hezbollah targets in just 10 minutes during Wednesday morning's rush hour, sending panic through the Lebanese capital. npr Lebanon declared a National Day of Mourning on Thursday, with its civil defense department reporting more than 250 people killed and over 1,160 wounded. 

The fundamental dispute is over scope. Israeli Prime Minister Benjamin Netanyahu asserted that the ceasefire does not extend to Lebanon or to Israel's campaign against Hezbollah — a position that directly contradicts Pakistani Prime Minister Sharif's announcement that the agreement called for a complete cessation of hostilities in Iran, Iraq, Lebanon, and Yemen. 

Iran accused the U.S. of violating multiple clauses of the deal framework and, in response to the continued strikes on Lebanon, Iranian media reported that Tehran had suspended tanker traffic through the Strait of Hormuz — the vital oil chokepoint whose reopening had been a cornerstone of the agreement.  The White House denied the reports, insisting the strait remained open.

Maritime intelligence firm Lloyds List reported that only three ships had transited the waterway since the ceasefire was announced — well below the pre-war daily average of nine vessels. 

Fragile Path Forward

High-level talks between the U.S. and Iran are scheduled to begin Saturday in Islamabad under Pakistani mediation, with Vice President Vance set to lead the American delegation. Iran confirmed its delegation would arrive Thursday night.

Confusion persists over the foundational terms of those negotiations, however, with Iran insisting its 10-point framework — which includes full Iranian control of the Strait of Hormuz, removal of all sanctions, and recognition of Iran's right to uranium enrichment — forms the basis of any deal. Washington has signaled no such concessions are on offer.

President Trump warned Wednesday that U.S. forces in the region would remain deployed until a durable agreement is reached and fully implemented. 

For gold and precious metals markets, the geopolitical calculus remains deeply unsettled. The brief ceasefire announcement triggered a sharp reversal in safe-haven flows, but the rapid re-emergence of hostilities — and the unresolved questions surrounding Lebanon, Hormuz, and nuclear enrichment — suggest the conflict's risk premium is far from extinguished. Any breakdown in the Islamabad talks this weekend could swiftly reignite demand for gold as a store of value in an increasingly unpredictable global environment.

Wishing you as always, good trading,