Gold steady as safe-haven demand faces mixed geopolitical signals

Gold prices were caught in a tug-of-war on Tuesday, dipping to a week’s low as safe-haven demand softened as Israel agreed to a ceasefire deal with Lebanon, while concern over Ukraine and US President-elect Donald Trump’s tariff plans limited declines.

Spot gold was steady at USD 2,626.83 per ounce as of 02:07 p.m. ET (1906 GMT), erasing some of the earlier losses when prices hit their lowest since Nov. 18. US gold futures settled 0.1% higher at USD 2,621.30.

This follows Monday’s dramatic USD 100 plunge, when gold retreated from a three-week high. The sell-off was fueled by Israel and Hezbollah ceasefire optimism and further pressured by Trump’s nomination of Scott Bessent as Treasury Secretary, which tempered demand for gold as a safe haven.

Israel’s security cabinet has agreed a ceasefire deal with Lebanon, Channel 12 reported on Tuesday.

“It’s probably some realization that a ceasefire between Israel and Hezbollah only modestly mitigates overall geopolitical risks, certainly there’s some optimism there,” said Peter Grant, vice president and senior metals strategist at Zaner Metals.

Concern over the wider fallout from Russia’s invasion of Ukraine continues to remain very high, however, Grant said adding that gold will likely experience choppy consolidation in the near term, ranging between USD 2,575-USD 2,750.

Gold is traditionally seen as a safe investment during economic and geopolitical uncertainty such as trade wars.

Trump’s pledge of big tariffs on Canada, Mexico, and China looms large. While they could spark trade wars and bolster gold’s appeal, the resulting inflation risks might tamper Federal Reserve rate cuts, potentially weighing on prices, analysts said.

Markets are now focused on Fed November meeting minutes later in the day. With a 56% chance of a December rate cut being priced in, investors remain cautious.

Minutes of the Federal Reserve’s Nov. 6-7 meeting showed, officials expressed differing views on potential future rate cuts. However, they collectively decided to withhold specific guidance on the likely direction of US monetary policy.

Some participants suggested a pause in rate easing if inflation stays high, while others proposed accelerated cuts if the labor market or economic activity weakens.

Spot silver rose 0.4% to USD 30.40 per ounce and palladium gained 1% to USD 982.87.

Platinum lost 1.3% to USD 926.35, with Commerzbank analysts forecasting
platinum prices to hit USD 1,100 in 2025.

(Reporting by Sherin Elizabeth Varghese and Anmol Choubey in Bengaluru; editing by Philippa Fletcher, Shreya Biswas, and Mohammed Safi Shamsi)