NEW YORK: Gold prices eased on Wednesday as a ceasefire between Iran and Israel reduced safe-haven demand, while market participants stayed cautious ahead of key US economic data.
Spot gold was down 0.3% at $3,314.45 per ounce at 0934 a.m. EDT (1334 GMT) after prices hit their lowest in over two weeks in the previous session.
US gold futures fell 0.2% to $3,328.10.
With all the momentum and potential in the markets, the factors that typically drive gold never pushed it to new highs, said Daniel Pavilonis, senior market strategist at RJO Futures
“So, I think the path is now more to the downside; it may hit $2,900 if things don’t escalate in the Middle East.” US President Donald Trump revelled in the swift end to war between Iran and Israel, saying he now expected a relationship with Tehran that would preclude rebuilding its nuclear programme.
Wall Street’s S&P 500 and Nasdaq indexes rose on Wednesday, hovering near a record peak.
Investors are also looking out for the second day of Federal Reserve Chair Jerome Powell’s congressional testimony, scheduled to start at 10:00 a.m. ET.
On Tuesday, Powell emphasized that a rate cut decision can only be taken after observing the affect of tariffs, inflation and weakness in the labour market.
The US GDP and jobs data are due on Thursday, while the Price Consumption Expenditure (PCE) data is scheduled to be released on Friday, which traders are closely monitoring to gauge the Fed’s future policy path better.
The market currently sees an over 85% chance of a rate cut in September.
Bullion tends to do well during periods of uncertainty and in a low-interest-rate environment.
Elsewhere, spot silver shed 0.3% to $35.79, platinum lost 0.8% to $1,305.74, while palladium dropped 1.8% to $1,046.73.
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