Gold Falls Toward $4,000 an Ounce as US-Iran Tensions Ease

Gold fell as military tensions between the US and Iran eased.

According to Bloomberg on June 28, spot gold dropped as much as 0.9% intraday to near $4,000 an ounce, giving back part of the 1.6% gain from June 27.

The decline followed news that the US and Iran had agreed to stop attacking each other and hold talks in Doha, Qatar, on June 30 to discuss the Strait of Hormuz and other issues.

The two sides had earlier heightened tensions over the weekend by exchanging retaliatory attacks, including a strike on a tanker carrying Qatari crude. International oil prices rose, but risk aversion in financial markets later eased after news that the ceasefire would resume.

Gold extended its weakness after the release of the US personal consumption expenditures price index for May. The PCE index, the Federal Reserve's preferred inflation gauge, rose 0.4% from a month earlier, matching market expectations and sending US Treasury yields lower.

Because gold does not pay interest, it tends to become less attractive when expectations for higher interest rates rise.

As of 8:05 a.m. in Singapore, spot gold traded at $4,062.47 an ounce, down 0.6% from the previous session. Silver fell 0.8% to $58.67, while platinum and palladium also traded lower.