Gold prices saw a sharp decline in Asian trading on Monday, driven by reduced safe-haven demand following reports of ceasefire talks between Israel and Hezbollah, signaling potential de-escalation in the Middle East.
Despite the drop, gold remained supported by last week’s gains, fueled by heightened tensions between Russia and Ukraine, which bolstered its appeal as a safe-haven asset. Spot gold fell 1.6% to $2,670.82 per ounce, while December gold futures dropped 1.5% to $2,697.10 per ounce as of 23:33 ET.
Meanwhile, broader metal prices found support from a weaker dollar, which retreated alongside Treasury yields. The dollar’s slide followed U.S. President Donald Trump’s nomination of prominent investor Scott Bessent as Treasury Secretary—a moderate choice that eased market uncertainties.
Israel-Hezbollah Ceasefire Talks Reported Reports from Axios and CNN over the weekend indicated that Israel is nearing a ceasefire agreement with the Lebanese militant group Hezbollah, with the U.S. acting as a mediator. According to The Times of Israel, Prime Minister Benjamin Netanyahu is finalizing how to present the deal, which reportedly includes a 60-day ceasefire and a mutual reduction in military activity.
While the potential for de-escalation in the Middle East dampened demand for gold, fresh strikes by both Israel and Hezbollah over the weekend cast doubt on the immediate success of the ceasefire efforts.
Gold maintained strong gains from the previous week, driven by escalating tensions between Russia and Ukraine. With limited prospects for de-escalation in the ongoing conflict, these tensions are expected to persist in the coming days.
On Monday, other precious metals also faced declines, with platinum and silver futures dropping over 1% each.
Dollar Losses Provide Limited Relief to Metal Markets
The dollar index retreated from a 13-month high on Monday following the nomination of Scott Bessent as Treasury Secretary. Analysts view Bessent as a moderate and stabilizing figure within the Trump administration, which contributed to a sharp drop in Treasury yields and weakened the dollar.
While the softer dollar helped mitigate some losses in metal markets, the relief was modest.
Industrial Metals Show Gains
Industrial metals fared better, with benchmark copper futures on the London Metal Exchange climbing 0.9% to $9,062.50 per ton, and December copper futures increasing 0.6% to $4.1630 per pound.
Copper traders are now focusing on a series of key economic data releases from China, the world’s largest copper importer, expected later this week.
