Gold fell today as its appeal as a safe haven eased after tensions in the Middle East eased.
Prices found themselves losing the most since February 2023, plunging as much as 2.5% to $2,331.22 an ounce after an impressive rally over the past five weeks.
The risk of an uncontrolled escalation of the conflict in the Middle East after the exchange of blows between Israel and Iran in the previous days has receded in the last 24 hours. Tehran chose again today to play down the impact and significance of the recent Israeli raid, saying on Monday that Israel has received “the necessary response at this stage”, as reported by Bloomberg.
In this climate, spot gold loses 2.3% to $2,337.88 per ounce, while silver sinks almost 5%.
The fact that the Iranian regime is downplaying Israel’s response — and has not indicated how it wishes to retaliate — has taken some of the risk premium out of the market, ABC Refinery’s Nicholas Frappell told Bloomberg. Declining oil prices also support the idea that tensions in the Middle East are easing, he adds.
However, gold remains about 13% higher this year after its latest rally to new records, with its gains supported by central bank purchases as well as demand from Asia, particularly China.
