Gold Prices Drop Sharply as Israel-Iran Ceasefire Sparks Risk-On Sentiment

Gold futures retreat $57 as safe-haven demand weakens; equities and risk assets rally sharply

Gold prices experienced a steep decline on Tuesday as global markets responded positively to the ceasefire agreement between Israel and Iran, reducing investor demand for traditional safe-haven assets. The XAU/USD pair dropped to near $3,336.50, reflecting a $57.70 (−1.70%) decline—erasing nearly two weeks of conflict-driven gains.

🟡 Israel-Iran Ceasefire Eases Geopolitical Tensions

The fragile truce, announced early Tuesday, initially faced skepticism due to mutual accusations of violations. However, renewed commitments from both governments helped calm investor fears. U.S. President Donald Trump, speaking from the NATO summit, claimed full credit for the diplomatic breakthrough, citing the destruction of Iran’s nuclear infrastructure.

Trump wrote on Truth Social: “It was my great honor to destroy all nuclear facilities & capability, and then, STOP THE WAR!” The ceasefire reduced expectations of further escalation, triggering a shift in global asset flows.

📉 Gold, Silver, and USD Decline on Risk-On Rotation

• Gold (XAU/USD): Fell $57.70 to $3,336.50, its lowest level in two weeks.
• Silver (XAG/USD): Dropped $0.33 (−0.92%) to $35.85, slipping below the key $36 support zone.
• US Dollar Index (DXY): Slid 0.90% to 97.88, its weakest level in over two years as traders pivoted away from the Greenback.

The decline in precious metals and the US Dollar reflects a broad reduction in global risk aversion.

📈 Stock Markets Rally on Optimism

The Nasdaq Composite surged 1.58% to 22,225, nearing record highs. Meanwhile, the S&P 500 climbed 1.19% and the Dow Jones Industrial Average gained 1.25%, supported by increased investor confidence in the de-escalation of Middle East tensions.

This sharp rotation into equities and out of safe-haven assets suggests a renewed appetite for risk, potentially keeping gold and silver under pressure in the near term.

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🔍 Key Takeaways for Traders

• Ceasefire between Israel and Iran reduces geopolitical risks.
• Gold and silver prices decline as safe-haven appeal fades.
• US Dollar Index weakens, supporting risk assets and equities.
• Traders may look for opportunities in growth-oriented assets while watching for any renewed tensions.

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