Gold price tumbles on reports of de-escalating Middle East tensions
Gold plunged 3% after Axios reported that Israel and Lebanon have accepted the terms of a ceasefire agreement.
A rally in gold stalled near a four-week high as investors braced for a stormy period in US-China relations with House Speaker Nancy Pelosi in Taiwan.
Spot gold fell less than 1% on Tuesday after earlier climbing above $1,788 an ounce. The precious metal often benefits from bouts of geopolitical turbulence and Pelosi’s trip adds to tailwinds that helped gold rebound from a 15-month low. Gold rose in anticipation of her visit, but gave back its gains after she landed as China announced military drills and missile tests.
Growing fears about the global economy have aided bullion’s recent advance. Also helping: an end of outflows from gold-backed exchange traded funds after 21 days of uninterrupted withdrawals, according to Commerzbank AG analyst Carsten Fritsch. While ETF holdings were reduced by 94 tons in July — the biggest monthly outflow since March 2021 — investor sentiment may be shifting, he added.
“Recently there were three consecutive days of inflows, which could point to a shift in sentiment among ETF investors,” Fritsch wrote in a note.
Spot gold declined 0.5% to $1,763.30 at 3:41 p.m. in New York. The Bloomberg Dollar Spot Index rose 0.7% as all other precious metals fell.
(By Swansy Afonso, Felix Njini and Andrea Bossi, with assistance from Martin Ritchie)
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