A wave of geopolitical calm boosted risk assets on Tuesday, while simultaneously hurting gold prices, which fell over 1%. The ceasefire between Israel and Iran, which brought an end to their 12-day conflict, significantly reduced global uncertainty and lessened the demand for gold as a safe-haven asset.
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 gold’s inverse relationship with broader market confidence.
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.