Gold prices retreat in the U.S. as investors secure gains after a recent rally driven by rising tensions in the Middle East. The metal edged lower on Monday following a strong start that pushed it near a two-month high.
Spot gold dropped by 0.5% to $3,414.32 per ounce as of early morning trading. U.S. gold futures also declined by 0.5%, settling at $3,434.80 per ounce. The retreat followed a sharp climb sparked by the latest conflict between Israel and Iran.
Violence over the weekend renewed fears of a broader regional war. Both countries launched attacks that killed and injured civilians, raising global concern. Gold, often viewed as a safe-haven asset, gained sharply in response.
Kelvin Wong, a senior analyst at OANDA, said the ongoing conflict had increased the political risk premium. “We are clearly above the $3,400 mark now, and momentum looks solid,” he noted. Wong added that gold may soon test the $3,500 resistance level if the trend continues.
Gold prices retreat as traders typically take profits after large moves. Monday’s pullback reflected cautious repositioning ahead of key central bank decisions this week.
President Donald Trump commented on the escalating conflict. He expressed hope that both Israel and Iran could reach a peaceful resolution. Still, he acknowledged that “sometimes countries have to fight it out first.”
Investors are now turning attention to the U.S. Federal Reserve. The central bank is expected to hold interest rates steady in its Wednesday announcement. However, markets are looking for any hints of possible rate cuts in the coming months.
So far, futures markets are pricing in two cuts by the end of 2025. Many expect the first reduction could happen in September, especially after recent inflation data came in lower than expected.
Gold prices retreat not only due to investor profit-taking but also as market expectations shift around interest rates and central bank policy. Meanwhile, other metals moved higher. Spot silver gained 0.2% to $36.36 per ounce. Platinum climbed 1.5% to $1,245.67. Palladium also rose 1.5%, reaching $1,043.53.
Despite Monday’s slight dip, analysts believe gold remains well-supported. Ongoing geopolitical tensions and uncertain rate outlooks continue to fuel demand for the metal.
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