By Joe Hoppe
Gold future prices tumbled as tensions between Israel and Iran eased and safe haven demand melted away.
June futures on the New York Mercantile Exchange were recently down 1.2% at $2,317.7 a troy ounce, after falling as low as $2,308.7 earlier in the session, its lowest price since April 5. They have slipped 2.7% over the last week, retreating from bullion's all-time high of $2,448.8 a troy ounce on April 12, but remain up 12.5% over the last three months.
On Friday, Israel launched a limited retaliatory missile strike at Iran, in response to a prior Iranian drone and missile attack.
On Monday, Iran's foreign ministry spokesman Nasser Kanaani said that Israel had received the "necessary response at this stage."
The narrow nature of Israel's retaliatory attack, and Iran's soft rhetoric--which the market perceived as attempts to avoid further escalation--prompted a sharp move lower in both oil prices and gold, Deutsche Bank analysts said in a note. On Monday gold recorded its biggest daily decline since June 2021.
Given positioning and recent price action, the risk of gold prices correcting down remains elevated near-term, but geopolitics remains a bullish wildcard, JPMorgan analysts said in a note. JPMorgan forecasts gold prices ending 2024 averaging $2,500 an ounce in the fourth quarter, with further upside next year.
Write to Joe Hoppe at joseph.hoppe@wsj.com
(END) Dow Jones Newswires
04-23-24 0421ET
