Gold Daily | Gold Prices Drop Over 1% Amid Eased Iran-Israel Tensions and Rate Cut Speculation

【Latest Gold Price and Recent Trends】

Gold prices fell over 1% on Tuesday, dropping to a two-week low, with spot gold down 1.4% to $3,319.84. The decline was influenced by easing geopolitical tensions between Iran and Israel, leading to reduced demand for safe-haven assets.

【Technical Analysis】

Gold is struggling near the 21-day simple moving average (SMA) at $3,352/oz after rebounding from a nine-day low of $3,333/oz. A failure to hold above the 21-day SMA could see prices retesting the 50-day SMA at $3,324/oz, with further downside potential to the Fibonacci 38.2% retracement level at $3,297/oz. Conversely, a breakthrough at the 21-day SMA could lead to a target of $3,400/oz, with resistance at $3,440/oz.

【Market Sentiment and Economic Background】

The ceasefire between Israel and Iran boosted global stock markets and eased concerns over oil supply disruptions, leading to a drop in oil prices, which further pressured gold’s appeal as an inflation hedge. Additionally, market participants are focusing on Federal Reserve Chair Jerome Powell’s testimony for signals on potential rate cuts. Currently, there is a 21% probability of a rate cut in July according to CME FedWatch, up from 14.5% last week.

【Analyst Opinions】

Ilya Spivak from Tastylive suggests that with easing US-Iran tensions, the geopolitical risks are receding in the short term, potentially leading to a technical correction in gold prices. If Powell indicates fewer rate cuts this year, the stronger dollar might weigh on gold. Analysts are also watching the Iran-Israel situation closely, as renewed hostilities could impact the dollar and gold prices.