Gold prices fell on Tuesday following the ceasefire agreement between Israel and Iran.
As geopolitical tensions eased in the Middle East, demand for gold, traditionally viewed as a safe-haven asset, dropped sharply.
Gold futures dropped 1.6% to 3,341 USD per ounce, about 5% below the record high of 3,500.05 USD set on April 22.
Although U.S. President Donald Trump has expressed that he is Not Happy that Israel and Iran continue to clash despite the ceasefire and is emphasizing compliance with the agreement, the market appears to be interpreting this as mere background noise.
Ricardo Evangelista, Senior Analyst at ActivTrades, told CNBC that the downward trend of gold prices reflects increased risk appetite among investors, driven by growing optimism about an end to the Israel-Iran conflict.
However, Evangelista believes it is unlikely for gold to dip below 3,000 USD in the short term, citing a support level around 3,300 USD per ounce.
The Australia and New Zealand Banking Group (ANZ) projects gold prices could climb to 3,600 USD per ounce by year-end.
ANZ anticipates that the Federal Reserve will cut interest rates by year-end, potentially triggering a new rally in gold as an alternative investment.
Looking ahead, ANZ predicts gold prices will peak in the latter half of this year and then gradually decline from next year, as the economic outlook improves and global trade uncertainties subside.
