WASHINGTON (dpa-AFX) - Gold prices dropped on Tuesday even as signs of the Israel-Iran conflict cooling off seem nowhere in the radar and an exchange of attacks continuing without a retreat.
Front Month Comex Gold for June delivery dipped $9.80 (0.29%) to $3386.60 per troy ounce today. Nonetheless, this settlement value is the sixth highest this year.
Front Month Comex Silver for June delivery gained 71.10 cents (1.95%) to $37.090 per troy ounce today.
Israel's barrage of attacks on Iran with drones and missiles targeting military, civilian, and infrastructure sites and counterattacks by Iran entered the fifth straight day today.
Yesterday, reports of Iran offering to re-negotiate on nuclear deals and its readiness for peace with Israel pulled down bullion price sharply. However, the said talks did not take off any further.
During his departure from the G7 summit in Canada, US President Donald Trump continued to stress that Iran failed to have a nuclear deal with the US which could have prevented Israel's attacks. He has reiterated that he wants a 'real end' and is not pushing for a ceasefire. In addition, he has asked for 'full evacuation' of Tehran city. This has rekindled the fears of the conflict escalating deeply.
On the economic front, data released by the US Commerce Department revealed that retail sales in the US declined 0.9% month-over-month in May. Fed data revealed that industrial production for May fell 0.2%. Both of these numbers are far below expectations.
Now, investors are keenly awaiting the US central bank's monetary policy and interest rate decision on Wednesday. Speculation is wide that the Fed may go in for two rate cuts by the year-end.
However, if the Middle East conflict deepens or more nations participate on either side, analysts expect gold prices to lurch upwards further and hold on there for longer.
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