The impact of the Middle East ceasefire extended far beyond gold on Tuesday, boosting global stock markets while denting oil prices. Gold, however, also saw a significant decline of over 1% as the ceasefire between Israel and Iran reduced the demand for safe-haven assets.
Spot gold dropped 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 the broad market reaction to the de-escalation of tensions.
Analysts noted that a “good bit of geopolitical risk” had exited the market. The ceasefire, affirmed by both President Trump and Prime Minister Netanyahu, played a crucial role in improving overall market sentiment across various asset classes.
The positive news for equities and oil, coupled with gold’s decline, demonstrates a clear shift in investor sentiment. 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.