Gold prices declined sharply in Asian trading Tuesday after U.S. President Donald Trump announced a full ceasefire between Israel and Iran, prompting investors to shift away from safe-haven assets. Spot gold dropped 1.1% to $3,332.57 per ounce by 02:00 ET, its lowest level since June 11. Meanwhile, August Gold Futures declined 1.4% to $3,346.02 per ounce.
The risk-on shift follows a period of heightened geopolitical tension labeled the “12 Day War”, which saw reciprocal military actions between Tehran and Washington. Trump’s message on Truth Social early Tuesday declared the ceasefire was in effect, adding, “PLEASE DO NOT VIOLATE IT!” Though some reports indicated explosions in Tel Aviv and Beersheba before the announcement, both sides have since confirmed their commitment to the truce—albeit cautiously.
Key Developments:
- Gold Spot: -1.1% to $3,332.57
- August Futures: -1.4% to $3,346.02
- Oil prices down 3% on reduced supply fears
- U.S. equity futures trending higher
Despite a weaker U.S. dollar offering mild support for bullion, market appetite has clearly shifted toward equities and riskier assets on hopes of lasting peace in the Middle East.
Market Eyes Powell Testimony, Dollar Eases
Investors are also treading carefully ahead of Federal Reserve Chair Jerome Powell’s two-day testimony before Congress starting Tuesday. Markets expect commentary on inflation, labor conditions, and potential rate cuts that could impact gold’s short-term trajectory.
Meanwhile, the U.S. Dollar Index slipped 0.3%, making commodities like gold and copper cheaper for foreign buyers. However, this wasn’t enough to offset the broader risk-on trend sparked by the ceasefire.
Precious metals showed mixed responses:
- Silver Futures: down 0.6% to $35.99/oz
- Platinum Futures: up 0.9% to $1,280.15/oz
As geopolitical concerns abate and risk appetite returns, the Fed’s stance on interest rates may now become the primary driver for gold and broader commodities in the days ahead.
Copper Rises as Industrial Demand Holds
Industrial metals, particularly copper, showed relative strength amid the broader market shift. A weaker dollar and hopes for global stability supported demand.
- London Copper Futures: up 0.3% to $9,693.35/ton
- U.S. Copper Futures: down 0.7% to $4.900/lb
While short-term moves remain headline-driven, copper continues to benefit from resilient industrial demand and dollar weakness—positioning it more favorably than precious metals for now.
Conclusion:
Gold’s decline reflects a significant sentiment shift as geopolitical risks ease. With Trump’s ceasefire announcement calming nerves and Powell’s testimony looming, traders are pivoting to equities and industrial metals, reducing exposure to traditional safe-haven assets like gold.
