Gold declines 1% as fears of expanding conflict in the Middle East recede

On Monday, gold prices experienced a decline of more than 1 percent as concerns about an escalating conflict in the Middle East eased, leading to reduced demand for safe-haven assets. Traders were also awaiting key inflation data in the United States later in the week for insights into potential changes in interest rates.

As of 0716 GMT, spot gold fell by 1.4 percent to $2,357.19 per ounce, while US gold futures dropped by 1.8 percent to $2,371.

Tehran’s efforts to downplay the significance of a drone attack attributed to Israel on Iran contributed to the de-escalation of tensions in the region.

Despite the recent decline, prices had surged to $2,417.59 in the previous session, approaching the record high of $2,431.29 set on April 12.

Investors are keenly anticipating the release of the personal consumption expenditures price index, the Federal Reserve’s preferred measure of inflation, scheduled for Friday.

In addition to gold, other precious metals also witnessed declines, with silver dropping by 3.2 percent to $27.72 per ounce, platinum losing 0.6 percent to $925.70, and palladium falling by 1.7 percent to $1,008.62.