Gold prices fall more than 1% as Israel-Iran ceasefire dents appeal

Gold prices fall more than 1% as Israel-Iran ceasefire dents appeal

Gold prices fell more than 1% to a near two-week low on Tuesday as risk appetite improved after a ceasefire came into effect to end a 12-day war between Iran and Israel, denting demand for safe-haven assets. Spot gold was down 1.4% at $3,319.84 an ounce, as of 0639 GMT, its lowest level since June 11.

U.S. President Donald Trump said on Tuesday a ceasefire between Israel and Iran was now in place and asked both sides not to violate it.(Representational Image)

U.S. gold futures slipped 1.7% to $3,335.50. "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 U.S. and Iran," said Ilya Spivak, head of global macro at Tastylive.

U.S. President Donald Trump said on Tuesday a ceasefire between Israel and Iran was now in place and asked both sides not to violate it. Israeli Prime Minister Benjamin Netanyahu said Israel has agreed to Trump's ceasefire proposal. The announcement drove global equities higher, while oil prices hit a two-week low as worries over supply disruption ebbed.

Investors now 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. Meanwhile, Trump on Tuesday said that interest rates in the country should be lowered by at least two to three percentage points.

"The bias for gold prices is higher, but we might see a correction in the 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. Elsewhere, spot silver fell 0.5% to $35.96 per ounce, platinum fell 1.1% to $1,280.58, while palladium slipped 2.2% to $1,055.15.