Gold Falls Toward $4,000 an Ounce as US-Iran Tensions Ease
Summary
- News that military tensions between the US and Iran were easing pushed international gold prices down toward $4,000 an ounce.
- Gold stayed weak as the US PCE price index for May matched market forecasts and US Treasury yields declined.
- As of Friday morning, spot gold, silver, platinum and palladium all traded lower, signaling a broader pullback in precious metals.
Forecast Trend Report by Period
Gold prices fell as easing military tensions between the US and Iran dented demand for haven assets.
Spot gold dropped as much as 0.9% on June 28, sliding toward $4,000 an ounce, Bloomberg reported. That pared part of the 1.6% advance on June 27.
The decline followed news that the US and Iran had agreed to halt attacks and hold talks in Doha, Qatar, on June 30 to discuss the Strait of Hormuz and other issues.
The two sides had heightened tensions over the weekend with retaliatory strikes, including an attack on a tanker carrying Qatari crude. Oil prices rose, but broader market risk aversion eased after reports that a ceasefire would resume.
Gold also remained under pressure after the release of the US personal consumption expenditures price index for May. The PCE index, the Federal Reserve's preferred inflation gauge, rose 0.4% from a month earlier, matching market expectations and sending US Treasury yields lower.
Because gold does not pay interest, it tends to lose appeal when expectations for higher rates rise.
As of 8:05 a.m. in Singapore, spot gold traded at $4,062.47 an ounce, down 0.6% from the previous session. Silver fell 0.8% to $58.67, while platinum and palladium also weakened.
