Gold falls as investor focus turns to G7 meeting, Fed rate decision
LONDON: Gold fell on Monday as investors weighed the impact of the ongoing Israel-Iran conflict, while also focusing on the Group of Seven (G7) leaders meeting and the US Federal Reserve policy decision later this week.
Spot gold fell 0.4% to $3,419.89 an ounce, as of 1059 GMT, after hitting its highest level since April 22 earlier in the session. US gold futures were down 0.4% to $3,439.80.
'Geopolitical tensions are not disappearing near term, as well rates are likely to be cut further by the central bank (Fed), so that should provide a floor to gold,' said Giovanni Staunovo, an analyst at UBS.
Iranian missiles struck Israel's Tel Aviv and the port city of Haifa before dawn on Monday, part of a wave of attacks by Tehran in retaliation for Israel's strikes on Friday.
The dangers of further escalation loomed over a summit of G7 leaders in Canada, as wars in Ukraine and the Middle East add to global economic uncertainty.
But there was no sign of panic among investors as currency markets stayed calm and Wall Street stock futures firmed after an early dip. 'Investors will be watching developments in the Middle East very closely, especially the risk of other countries being dragged into the conflict,' said Ole Hansen, head of commodity strategy at Saxo Bank.
Gold is considered a safe-haven asset during times of geopolitical and economic uncertainty. It also tends to thrive in a low-interest rate environment.
The Fed's interest rate decision on Wednesday followed by Fed Chair Jerome Powell's comments will be eagerly watched.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
2 hours ago
- Business Recorder
Gold rises as Israel-Iran fighting, Trump's evacuation call spark demand
Gold rebounded on Tuesday as heightened geopolitical uncertainty stemming from Israel-Iran fighting and U.S. President Donald Trump's call to evacuate Tehran led investors to seek safe-haven assets. Spot gold rose 0.4% at $3,396.67 an ounce, as of 0239 GMT, after dropping more than 1% on Monday. U.S. gold futures were steady at $3,416.30. 'Market sentiment continues to swing between escalation and de-escalation regarding events in the Middle East, and these back-and-forth sentiment shifts are what is driving the gold price's moves either side of the $3400 level,' KCM Trade Chief Market Analyst Tim Waterer said. The fifth consecutive day of fighting between Israel and Iran saw Israel strike Iran's state broadcaster on Monday, while the head of the U.N. nuclear watchdog reported extensive damage to Iran's largest uranium enrichment facility. Trump, returning early from the G7 summit in Canada Monday night, urged Iranians to evacuate Tehran, citing the country's rejection of a nuclear weapons development curb deal. Reports also indicated that Trump had requested the national security council to remain prepared in the situation room. Gold is considered a safe-haven asset during times of geopolitical and economic uncertainty. 'There is enough prevailing uncertainty surrounding both tariff wars and actual wars to buttress the gold price and keep it within sight of a potential return to $3,500,' Waterer said. Gold price per tola falls Rs700 in Pakistan Investors are also looking forward to U.S. Federal Reserve meeting scheduled to start later in the day, with decision on Wednesday. The Fed is expected to hold rates steady but the focus yet again will be on the path its Chair Jerome Powell charts out for future rate cuts. Traders are currently pricing in two cuts by this year-end. Elsewhere, spot silver was up 0.3% at $36.41 per ounce, platinum rose 0.6% to $1,251.20, while palladium edged up 0.2% to $1,031.68.
Business Recorder
2 hours ago
- Business Recorder
India equity benchmarks set for muted open after Trump's Tehran warning
India's benchmark indexes are set for a muted open on Tuesday, as investors adopt a cautious stance following U.S. President Donald Trump's call to evacuate Tehran amid escalating Israel-Iran tensions. The Gift Nifty futures were trading at 24,960 as of 8:02 a.m. IST, indicating that the Nifty 50 will open near Monday's close of 24,946.5. U.S. stock futures slipped and oil prices rose on Tuesday, as the fifth day of Israel-Iran fighting heightened fears of a broader regional conflict. India's equity benchmarks snap two-day losing streak Trump cut short his attendance at the Group of Seven summit in Canada, citing mounting tensions in the Middle East. He also reiterated that Iran should have agreed to a nuclear deal with the United States. India's equity benchmarks rebounded in the previous session, lifted by gains in heavyweight IT and financial stocks, even as geopolitical worries lingered. Foreign portfolio investors (FPI) remained net sellers of Indian shares for the fourth straight session on Monday, with outflows amounting to 25.39 billion rupees ($295.9 million). Domestic institutional investors continued to be net buyers for the 20th straight session. 'Evolving geopolitical developments and oil price trends will be key drivers for domestic equities in the near term,' said Satish Chandra Aluri, analyst at Lemonn Markets Desk.
Business Recorder
3 hours ago
- Business Recorder
US and UK announce a trade deal, but steel imports unresolved
KANANASKIS: US President Donald Trump signed an agreement on Monday formally lowering some tariffs on imports from Britain as the countries continue working toward a formal trade deal. The deal, announced by Trump and British Prime Minister Keir Starmer on the sidelines of the G7 Summit in Canada, reaffirmed quotas and tariff rates on British automobiles and eliminated tariffs on the U.K. aerospace sector, but the issue of steel and aluminum remains unresolved. Other critical industries, such as pharmaceuticals, were not mentioned. Trump said the relationship with Britain was 'fantastic,' as he waved, and then briefly dropped, a document that he said he had just signed. 'We signed it and it's done,' he said, incorrectly calling it a trade agreement with the European Union, before making clear the deal was with Britain. Starmer called it 'a very good day for both of our countries, a real sign of strength' The U.S. intends to impose a quota on steel and aluminum imports from the United Kingdom that would be exempt from 25% tariffs, but it is conditioned upon Britain's demonstrating security on steel supply chains and production facilities, according to an executive order released by the White House. The quota level will be set by Commerce Secretary Howard Lutnick, the White House said. Britain had avoided tariffs of up to 50% on steel and aluminum that the U.S. imposed on other countries earlier this month, but it could have faced elevated tariffs starting July 9 unless a deal to implement the tariff reduction was reached. The two leaders reaffirmed a plan to give British carmakers an annual quota of 100,000 cars that can be sent to the United States at a 10% tariff rate, less than the 25% rates other countries face. The plan will go in effect seven days after it is published in the Federal Register, the White House said. The agreement also eliminates tariffs on the UK aerospace industry, including parts and planes, according to the executive order. G7 leaders in Canada to discuss Israel-Iran conflict, hope to avoid Trump clash Britain was the first country to agree on a deal for lower tariffs from Trump, with the U.S. reducing tariffs on imports of UK cars, aluminum and steel, and Britain agreeing to lower tariffs on U.S. beef and ethanol. But implementation of the deal has been delayed while details were being hammered out and some issues remain outstanding. Britain called the deal a huge win for its aerospace and auto sectors, noting the UK was the only country to have secured such a deal with Washington. 'Bringing trade deals into force can take several months, yet we are delivering on the first set of agreements in a matter of weeks. And we won't stop there,' UK Trade Secretary Jonathan Reynolds said in a statement. Reynolds said the two sides agreed to reciprocal access to 13,000 metric tons of beef, while making clear that U.S. imports would need to meet tough UK food safety standards. He said both countries remain focused on securing 'significantly preferential outcomes' for the UK pharmaceutical sector, and work would continue to protect industry from any further tariffs imposed as part of Section 232 investigations underway by the U.S. Commerce Department. Asked if the deal protects the United Kingdom from future tariff threats, Trump responded: 'The UK is very well protected. You know why? Because I like them. That's their ultimate protection.'
