Gold prices drop as Middle East tensions ease
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The news: Gold prices have dropped to a one-week low as worries over a wider Middle East conflict subsided, prompting investors to scale back safe-haven trades in favour of riskier assets like equities.
The numbers: Spot gold tumbled 2.5% at USD2,330.51 ($3,661) per ounce, its biggest intraday fall in more than a year. US gold futures fell 2.8% to USD2,346.40.
The context: The decline comes after Tehran downplayed Israel's retaliatory drone strike against Iran, in what appeared to be a move aimed at averting regional escalation, Reuters reported.
Gold also came under pressure as Wall Street's main indices opened higher, cutting demand for the safe-haven and non-interest paying asset.
Geopolitical tensions coupled with robust central bank buying had driven gold to a record high of USD2,431.29 on 12 April.
Investors are now waiting for the release of the US personal consumption expenditures report on Friday for cues on the prospect of a US interest rate cut.
The source: Reuters
