Gold Loses Safe-Haven Appeal as Iran Skips Talks, Ceasefire Extended

SEATTLE (Scrap Monster): Gold prices fell sharply after the latest ceasefire extension reduced demand for safe-haven assets, despite Iran failing to attend peace talks. While initial risk-off flows lifted oil and the US dollar, the muted follow-through suggests markets are increasingly confident that geopolitical risks have peaked, keeping risk appetite broadly supported.

Gold Weakens as Ceasefire Extension Dampens Safe-Haven Demand

A mild bout of risk-off was triggered on Tuesday following reports that Vice President Vance’s trip to Pakistan for US-Iran peace talks had been postponed. Pakistan was left hanging, awaiting formal confirmation from Iran of their attendance—confirmation that never arrived. Iran eventually stated that talks could resume once the US lifted its military blockade on Iranian exports.

The usual market reactions followed. Brent crude oil rose above $100 a barrel, with the US dollar strengthening in tandem. Wall Street indices pulled back from what could be described as complacent record highs. Gold is turning lower after a failed bid to break above $5000.

Yet the moves were limited, as President Trump was quick to announce that the ceasefire had been extended anyway. The fact that Iran did not attend the talks yet still received an extension helps explain why markets are betting that peak war uncertainty is now firmly in the rear-view mirror. From that perspective, risk appetite is likely to remain supported, with traders continuing to buy dips on Wall Street and fade rallies in the US dollar.

Courtesy: www.forex.com