Gold began a significant retreat on Tuesday, with prices falling more than 1%, as a truce between Israel and Iran dampened demand for safe-haven assets. The ceasefire, which effectively ended a 12-day conflict, significantly improved risk appetite among investors.
Spot gold dropped 1.4% to $3,319.84 an ounce, reaching its lowest point in nearly two weeks. U.S. gold futures also saw a notable decline, slipping 1.7% to $3,335.50. This downturn highlights gold’s sensitivity to shifts in geopolitical stability.
According to Ilya Spivak of Tastylive, a “good bit of geopolitical risk” has exited the market following signs of de-escalation. Both President Trump and Prime Minister Netanyahu confirmed the ceasefire, signaling a positive shift in the region.
The ceasefire announcement had a ripple effect, boosting global equities and causing oil prices to fall to a two-week low as worries over supply disruption abated. Investors now await Fed Chair Jerome Powell’s testimony, which could provide further insights into interest rate policy, a key factor for gold’s performance.