A relief rally swept through markets on Tuesday, unfortunately hitting gold prices, which dropped over 1%. The catalyst was the ceasefire between Israel and Iran, which brought an end to their 12-day conflict. This de-escalation boosted risk appetite, diverting investment away from safe-haven assets.
Spot gold fell 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 highlights gold’s vulnerability to periods of reduced global uncertainty.
Analysts noted that a “good bit of geopolitical risk” had exited the market, thanks to the de-escalation efforts. The ceasefire, affirmed by President Trump and Prime Minister Netanyahu, played a crucial role in improving 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.
