Gold Pulls Back as Ceasefire Announcement Eases Geopolitical Tensions

Highlights:

• Gold prices fell 0.6% to US$3,348.68 an ounce as haven demand eased after Trump announced an Israel-Iran ceasefire.
• Spot bullion briefly dipped below US$3,335, interrupting its strong 28% year-to-date rally driven by geopolitical tensions.
• Investor focus shifts to upcoming comments from Fed Chair Jerome Powell for clues on potential interest rate cuts.

Trump's post claiming Israel-Iran ceasefire sends bullion lower amid shifting haven demand

Gold prices dipped on Tuesday following a surprise announcement from former U.S. President Donald Trump that Israel and Iran had agreed to a ceasefire. The announcement, made via his Truth Social platform, comes just days after reported U.S. strikes on Iranian nuclear sites and is seen by markets as a potential de-escalation of Middle East tensions.

Bullion Retreats After Strong Year-to-Date Rally

Spot gold fell as much as 1% earlier in the day, briefly trading below US$3,335 an ounce before paring some of its losses. At the time of writing, gold was down 0.6% at US$3,348.68 an ounce in Singapore trading, reflecting easing demand for safe-haven assets. The Bloomberg Dollar Spot Index also declined by 0.3%, further impacting the metal’s movement. The precious metal has surged 28% year-to-date, largely due to intensifying global conflict, economic uncertainty, and central bank buying. However, Trump’s ceasefire claim appears to have provided temporary relief to risk-averse investors, prompting some to reduce their exposure to gold.

Investors Shift Focus to Fed and Tariffs

While gold has found support from concerns about the economic effects of Trump’s proposed tariffs and dovish monetary expectations, attention is now turning to upcoming remarks by Federal Reserve Chair Jerome Powell. Markets are watching closely for signals on potential interest rate cuts, which would typically support gold prices due to its non-yielding nature. Other precious metals showed mixed moves: platinum and palladium edged lower, while silver held steady. Although the precise details and confirmation of the Israel-Iran ceasefire remain unclear at the time of writing, the announcement has already reshaped market sentiment in the short term.

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