Bullion experienced a clear retreat on Tuesday, with gold prices falling over 1%, as Middle East peace promoted increased risk-taking in markets. The ceasefire between Israel and Iran, ending their 12-day conflict, significantly reduced geopolitical uncertainty and diminished the demand for gold as a safe haven.
Spot gold dropped 1.4% to $3,319.84 an ounce, its lowest level in almost two weeks. U.S. gold futures also experienced a notable decline, slipping 1.7% to $3,335.50. This immediate market reaction underscores how sensitive gold prices are to major international developments.
Analysts noted that a “good bit of geopolitical risk” had exited the market. The ceasefire, affirmed by both President Trump and Prime Minister Netanyahu, played a crucial role in improving overall market sentiment.
The positive news extended to other markets, with global equities gaining ground and oil prices retreating to a two-week low as concerns over supply disruptions eased. Investors are now keenly awaiting Fed Chair Jerome Powell’s testimony, which will be crucial for understanding the Federal Reserve’s stance on interest rates, a vital element for gold’s performance.