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Gold prices fell to a near two-week low on Tuesday as risk appetite improved after US President Donald Trump said Iran and Israel had agreed to a ceasefire, denting demand for safe-haven assets.
Spot gold was down 0.5 per cent to $3,351.47 an ounce, as of 0257 GMT, after hitting its lowest level since June 11 earlier in the session.
Read-Gold gains as Israel-Iran crisis lifts safe-haven appeal
US gold futures slipped 0.9 per cent to $3,365.30.
“It seems like there’s a good bit of geopolitical risk that’s exiting the market here near term after, of course, we have signs of de-escalation between the US and Iran,” said Ilya Spivak, head of global macro at Tastylive.
Trump announced a complete ceasefire between Israel and Iran, potentially ending the 12-day conflict that saw millions flee Tehran and prompted fears of further escalation in the war-torn region.
There was no immediate comment from Israel. While an Iranian official earlier confirmed that Tehran had agreed to a ceasefire, the country’s foreign minister said there would be no cessation of hostilities unless Israel stopped its attacks.
Global shares rallied, while oil prices slipped to a one-week low after Trump announced the Iran-Israel ceasefire.
Meanwhile, US Federal Reserve Vice Chair for Supervision Michelle Bowman said on Monday that the time to cut interest rates is approaching amid potential risks to the job market.
Investors await testimony by Fed Chair Jerome Powell before the House Financial Services Committee later on Tuesday. Powell has been cautious about signalling near-term easing.
“The bias for gold prices is higher, but we might see a correction in near-term and an uptick in the dollar if Powell convinces markets that they’re not going to cut more than twice this year,” Spivak said.
Gold tends to thrive in a low-interest-rate environment.
