Gold prices fell over 1% on Monday as traders locked in gains following an eight-week peak, shifting focus towards the Federal Reserve’s upcoming policy decision and ongoing Israel-Iran hostilities.
Spot gold slid 1.2% to $3,392.86 per ounce by late U.S. afternoon trading, retreating from its highest level since April 22 reached earlier in the session. U.S. gold futures settled 1% lower at $3,417.30. This decline partially reversed Friday’s 1% gain.
Key Drivers:
- Profit-Taking: “Gold has moved higher over the past several sessions, largely in response to the conflict between Israel and Iran. Today, we’re seeing more of a pullback, likely due to profit-taking after that higher move,” explained David Meger, director of metals trading at High Ridge Futures.
- Geopolitical Watch: Iran called on U.S. President Donald Trump to pressure Israel for a ceasefire as the aerial conflict entered its fourth day. Israeli PM Benjamin Netanyahu declared his country was on the “path to victory.” Concurrently, G7 leaders began talks in Canada.
- Fed Meeting Focus: The market’s attention is firmly on the Fed’s two-day policy meeting concluding Wednesday. While rates are widely expected to remain unchanged, the central bank’s guidance is crucial. Meger noted, “Given significant uncertainty… from tariffs to geopolitical tensions… it wouldn’t be surprising to see the Fed delay any interest rate cuts, effectively kicking the can down the road.” Gold, a traditional inflation and instability hedge, benefits from lower interest rate environments.
Market Context:
- U.S. stock index futures rose while the dollar softened in choppy trading.
- Among other precious metals: Spot silver steadied at $36.33/oz, platinum rose 2% to $1,252.57, and palladium gained 0.8% to $1,036.10.
Gold Dips 1% as Traders Take Profits; Focus Shifts to Fed Meeting and Mideast Tensions