Gold Prices Slip Over 1% as Israel-Iran Tensions Ease and Fed Decision Looms

June 16, 2025 | Taaza Wire Business Desk

Gold Prices Fall Amid Israel-Iran Conflict: In a dramatic turn on Monday, gold prices fell over 1% after reaching an eight-week high, as traders opted to book profits amid easing fears over the Israel-Iran conflict and anticipation around the U.S. Federal Reserve’s upcoming policy meeting. Sources reuters

Gold Dips After Geopolitical Surge

Spot gold dropped 1.1% to $3,396.09 per ounce by 10:10 a.m. EDT (1410 GMT), retreating from its earlier high—the strongest since April 22. U.S. gold futures also fell 1.1%, trading at $3,415 per ounce.

This decline comes after gold posted a strong rally last week, gaining over 1% on Friday, driven by escalating conflict in the Middle East. However, with tensions showing early signs of potential de-escalation, the market witnessed a wave of profit-taking.

“Gold had rallied for several sessions largely due to geopolitical fears, particularly the Israel-Iran conflict. Today’s pullback reflects some profit-booking now that we’re seeing diplomatic signals,” said David Meger, director of metals trading at High Ridge Futures.

Israel-Iran Conflict: Diplomacy on the Horizon?

The Wall Street Journal reported that Iran has expressed willingness to end hostilities and resume diplomatic talks concerning its nuclear program. According to the report, Tehran has sent messages through Arab intermediaries to both the U.S. and Israel, seeking a path to de-escalation.

Meanwhile, the international community remains on edge. Iran recently launched missile attacks on Tel Aviv and Haifa, escalating tensions across the region. However, the new diplomatic overtures may offer a sliver of hope for peace.

G7 Leaders Meet Amid Geopolitical Jitters

Adding to the global backdrop, G7 leaders began their annual summit in Canada today. While economic growth and climate change remain key agenda items, the Israel-Iran conflict and energy security are expected to dominate behind-the-scenes discussions.

All Eyes on the Fed: Interest Rate Clarity Coming

The gold market is also reacting to the upcoming Federal Reserve policy meeting, set to conclude on Wednesday. The Fed is widely expected to hold interest rates steady, as policymakers tread carefully amid an uncertain global economic landscape.

“With ongoing geopolitical uncertainty and sluggish economic signals, the Fed will likely opt for a wait-and-watch approach. No rate cuts for now, just a delay to see how things unfold,” Meger added.

For gold, a low interest rate environment is typically bullish, as it lowers the opportunity cost of holding the non-yielding asset. However, with no immediate action expected from the Fed, traders are playing it cautiously.

Other Precious Metals Show Mixed Movement

While gold saw a dip, other precious metals showed notable strength:

• Silver remained steady at $36.31 per ounce
• Platinum surged 3.4%, reaching $1,269.15
• Palladium gained 2% to trade at $1,048.36

Platinum’s rally, in particular, stood out as industrial demand expectations improved.

Market Snapshot

• Gold (Spot): $3,396.09 (-1.1%)
• Gold (Futures): $3,415 (-1.1%)
• Silver: $36.31 (steady)
• Platinum: $1,269.15 (+3.4%)
• Palladium: $1,048.36 (+2%)

Meanwhile, U.S. stock index futures rose modestly, and the dollar slipped, reflecting mixed investor sentiment ahead of the Fed announcement.

Conclusion: A Pause Before the Next Move

Gold’s decline today doesn’t indicate weakness—rather, it reflects a momentary pause. With geopolitical risks still hovering and inflation concerns persistent, bullion remains a safe-haven favorite for investors. The next move could hinge on two fronts:

• Whether diplomacy wins in the Middle East
• What the Fed signals about the timing of rate cuts

As always, investors and traders should watch this space closely.

Stay tuned to Taaza Wire for real-time updates on gold prices, global conflicts, and the Fed’s big decisions.

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