Gold Futures Fall as Safe-haven Demand Ebbs on Cease-fire — Market Talk

Gold's bullish momentum is likely to persist, according to RHB research analyst Aiman Kamil Bin Ahmad Shauqi in a commentary. "Despite the indecisive pattern, the formation of a fresh 'higher high' close, accompanied by a long lower shadow, suggest the underlying buying interest remains intact," the analyst says. A long lower shadow indicates a period that prices initially fell significantly, but strongly rebounded after. The yellow metal is expected to build on its momentum and retest the US$3,500 resistance, RHB says. Given the sustained bullish momentum, RHB maintains its positive trading bias. Spot gold is down 1.4% at $3,320.03/oz. (tracy.qu@wsj.com)

Gold fell to the $3,325 mark on Tuesday, a two week low, as markets assessed the sustainability of the ceasefire between Iran and Israel.

Tehran and Tel-Aviv had agreed to a momentary ceasefire after exchanging strikes since last week, but reports of fresh missile launches and strike orders raised skepticism on the validity of truce and supported concerns that the conflict will soon resume.

This was after the exchange of controlled strikes between Iran and the US minimized collateral damage and preluded a period of apparent de-escalation, reducing the appeal of gold's safety and preventing the metal from retesting record highs of $3,500 from late April.

In the meantime, key FOMC members noted that they are not opposed to a rate cut in the Fed's upcoming July meeting amid signs of a wavering labor market and disinflation in consumer prices.