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Gold prices fell by more than 1% on Tuesday as easing geopolitical tensions following U.S. President Donald Trump’s announcement of a ceasefire between Israel and Iran prompted investors to move away from safe-haven assets.
Spot Gold fell 1.1% to $3,332.57 an ounce by 02:00 ET (06:00 GMT), marking its lowest level since June 11. Gold Futures for August also dropped 1.4% to $3,346.02/oz.
Trump’s Ceasefire Announcement Shifts Investor Sentiment
President Trump declared a full ceasefire between Israel and Iran late Monday, signaling a potential end to the ongoing conflict, referred to as “THE 12-DAY WAR.”
In a social media post on Truth Social early Tuesday, Trump confirmed, “THE CEASEFIRE IS NOW IN EFFECT. PLEASE DO NOT VIOLATE IT!”
However, despite the announcement, media reports indicated explosions were heard near Tel Aviv and Beersheba in southern Israel shortly before Trump’s statement. Reports also confirmed that Iran had agreed to the truce, although its foreign minister warned that the truce would only hold if Israel halted all military actions.
The ceasefire follows the U.S. bombing of three Iranian nuclear sites and Iran’s retaliation on Monday by launching missile attacks on the U.S. airbase in Qatar.
Markets reacted positively to the ceasefire news, with U.S. stock index futures rising and oil prices sliding more than 3%, alleviating concerns over supply disruptions in the Middle East.
Shift Away from Safe-Haven Assets
As tensions de-escalated, investors moved away from traditional safe-haven assets like gold, redirecting funds into equities and other risk-on assets.
Despite some support from a weaker dollar, market sentiment remained cautious, with investors awaiting Federal Reserve Chair Jerome Powell’s two-day testimony before Congress starting Tuesday. Powell’s comments on future monetary policy, particularly any cues on potential interest rate cuts, could further influence market direction.
Precious Metals Retreat, Copper Gains on Dollar Weakness
Broader metal prices also declined as investors shifted toward riskier assets in response to the growing optimism of geopolitical stability.
Silver Futures fell 0.6% to $35.99 per ounce, while Platinum Futures rose 0.9% to $1,280.15/oz.
Meanwhile, Copper Futures on the London Metal Exchange gained 0.3% to $9,693.35 a ton, supported by a weaker U.S. dollar. However, U.S. Copper Futures dropped 0.7% to $4.900 a pound. The U.S. Dollar Index fell 0.3% during Asian hours, offering support to industrial metals like copper.
