Investors pivoted away from gold on Tuesday, driving its price down by over 1%, as the 12-day conflict between Israel and Iran concluded with a ceasefire. The end of hostilities immediately reduced the perceived need for safe-haven investments, shifting market focus towards riskier assets.
Spot gold fell 1.4% to $3,319.84 an ounce, its lowest point in almost two weeks, while U.S. gold futures also saw a significant drop, slipping 1.7% to $3,335.50. This swift reaction underscores how sensitive gold prices are to major geopolitical events.
According to analysts, the de-escalation of tensions, confirmed by both President Trump and Prime Minister Netanyahu, removed a considerable amount of geopolitical risk from the market. This led to an improvement in overall risk appetite.
The ceasefire announcement had a broad impact, boosting global equities and causing oil prices to fall to a two-week low as supply disruption concerns eased. Attention now turns to Fed Chair Jerome Powell’s testimony, which could provide further clues about the future of interest rates, a key factor for gold.
