Gold prices fall amid reports of Israel-Hezbollah ceasefire deal
Gold prices fell sharply in Asian trade on Monday, weighed down by a decline in safe-haven demand after reports of a ceasefire between Israel and Hezbollah suggested a potential de-escalation in the Middle East.
However, the yellow metal has been on a strong run since last week, as rising tensions between Russia and Ukraine boosted safe-haven demand.
Spot gold fell 1.6% to $2,670.82 an ounce, while December gold futures fell 1.5% to $2,697.10 an ounce by 11:33 p.m. ET (04:33 GMT).
Broader metal prices were boosted by a sharp decline in the dollar, which retreated along with Treasury yields after U.S. President Donald Trump nominated prominent investor Scott Bessent, seen as a moderate choice, as his Treasury secretary.
Bessent’s nomination also removed a major speculation for the market. Israel has agreed to a ceasefire with Hezbollah, Axios and CNN reported over the weekend, with the US brokering the deal. The Times of Israel reported that Prime Minister Benjamin Netanyahu is working on ways to publicly announce the ceasefire deal, after agreeing in principle to the Lebanon deal.
The deal could include a 60-day ceasefire with Hezbollah and a de-escalation of military action on both sides. Reports of the deal suggested a potential de-escalation in the long-running Middle East conflict, which has included calls for gold as a safe haven. However, the agreement was undermined by Israel and Hezbollah launching more attacks on each other over the weekend.
Gold was sitting on strong gains through the past week after a ramp-up in tensions between Russia and Ukraine. These tensions are likely to continue this week, with few avenues for de escalation in the long-running conflict.
Other precious metal prices also sank on Monday, with platinum and silver futures losing over 1% each. Dollar losses offer metal markets some relief
The dollar index slid from a 13-month high on Monday after Bessent’s nomination, with analysts viewing him as a voice of moderation and reason in the Trump administration.
Treasury yields fell sharply on this notion, which in turn weighed on the dollar.
Weakness in the dollar helped contain some losses in metal markets, although this relief was limited.
Industrial metals, however, advanced. Benchmark copper futures on the London Metal Exchange rose 0.9% to $9,062.50 a ton, while December copper futures rose 0.6% to $4.1630 a pound.
Copper markets were awaiting a barrage of key economic readings from top importer China, due later this week.
Source: Investing.com
