Gold price takes a beating on ceasefire news

Gold pulled back sharply in overnight trade on Tuesday following US President Donald Trump’s surprise announcement that Israel and Iran had agreed to a complete ceasefire.

Gold prices fell as much as 2% to the $3,300-an-ounce level during the early hours of trading, before recovering to around $3,320 per ounce.

Still, bullion remains up more than 25% since the start of the year with investors piling into the metal as a safe haven asset during geopolitical turmoil.

The economic fallout of trade tensions also persuaded investors to opt for bullion over riskier assets and continued central bank buying underpinned the metal’s advance this year.

Peter Grant, vice president and senior metals strategist at Zaner Metals, believes the de-escalation of tensions in the Middle East is the primary factor weighing on gold right now. “The safe-haven bid has diminished and the market is in more of a risk-on mode.”

“We’ve got pretty good support around $3,300 and then even better support probably at $3,250,” Grant added.

(With files from Reuters)