Gold prices tumbled on Tuesday (June 24th) during Asian trading hours, reaching a two-week low as a ceasefire agreement between Israel and Iran diminished risk aversion sentiments. After consecutive buying sessions, the massive SPDR Gold Trust fund sold off during this session.
As of 8:40 a.m. Vietnam time, spot gold prices in Asian markets rose by $7/oz compared to the previous session’s close in the US, equivalent to a gain of over 0.2%, trading at $3,331.9/oz, according to Kitco exchange data. When converted using Vietcombank’s selling rate, this price corresponds to approximately VND 105.6 million per tael, a decrease of VND 400,000 per tael from the previous day’s morning session.
At the same time, Vietcombank quoted USD at VND 25,957 (buying rate) and VND 26,307 (selling rate), a decrease of 33 VND on the buying side and 3 VND on the selling side compared to the same period the previous day.
On Tuesday, New York spot gold prices closed at $3,324.9/oz, a decline of over $45/oz or 1.3% from the previous session’s close. During the session, prices dropped by more than 2% to their lowest level since June 9th.
On the COMEX exchange, gold futures fell by 1.8%, settling at $3,333.9/oz.
“The de-escalation of tensions in the Middle East is the main factor putting downward pressure on gold prices. Risk aversion has subsided as risk appetite has increased,” said senior strategist Peter Grant of Zaner Metals, in a statement to Reuters. Grant believes that gold is finding relatively strong support at the $3,300/oz level and even stronger support at $3,250/oz.
On Tuesday, President Donald Trump worked to uphold a fragile ceasefire agreement between Israel and Iran, which took effect early Tuesday morning. Both sides accused each other of violating the truce. Iran reported an attack on a radar system near its capital, Tehran, while Israel accused Iran of firing missiles, which Iran denied.
In a post on Truth Social media, Trump wrote, “Israel will not attack Iran,” adding that the ceasefire remains in effect. Previously, he expressed dissatisfaction with both countries for their violations of the agreement, stating that he was “not happy” with either side.
For global investors, the current geopolitical risks in the Middle East have temporarily taken a back seat as the US involvement in the conflict has been brief and limited, and Iran’s response has been muted. Global stock markets rallied on Tuesday, while oil prices and the US dollar both fell.
However, given the fragile nature of the ceasefire agreement, investors are unlikely to significantly reduce their gold holdings.
“There are some questions about whether this ceasefire will actually hold. Until those questions are answered, I think the downside for gold will be limited,” Grant added.
Another significant event on Tuesday was the testimony of Jerome Powell, Chairman of the Federal Reserve, before the House Financial Services Committee. Powell’s stance at the hearing offered no new insights, as he continued to signal that the Fed is in no rush to cut interest rates and will wait to assess the full impact of tariffs on the economy.
While Powell’s stance on maintaining interest rates for a prolonged period is unfavorable for gold, which is a non-interest-bearing asset, the market still anticipates two rate cuts from the Fed this year, each by 0.25 percentage points, with the first cut expected in October.
The world’s largest gold ETF, SPDR Gold Trust, sold off 1.7 tons of gold during Tuesday’s session, reducing its holdings to 955.7 tons. In the previous session, the fund purchased over 7 tons of gold, following a 10-ton acquisition the week before.
Year-to-date, the Dollar Index has dropped by nearly 10%, according to Market Watch data, as investor confidence in American assets wanes amid Trump’s unpredictable trade policies.
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