Gold prices dropped more than 1% on Monday as traders booked profits following an eight-week high, while market attention remained on escalating tensions between Israel and Iran and the upcoming Federal Reserve policy meeting.
By 1:53 p.m. EDT (17:53 GMT), spot gold declined 1.2% to $3,392.86 an ounce, retreating from its highest level since April 22 reached earlier in the session. The metal had surged more than 1% on Friday, driven largely by geopolitical concerns.
“Gold has rallied in recent sessions mainly due to the Israel-Iran conflict,” said David Meger, director of metals trading at High Ridge Futures. “Today’s pullback is a natural correction, likely due to profit-taking after that sharp move.”
The conflict intensified as Iran urged U.S. President Donald Trump to pressure Israel into a ceasefire to end the ongoing four-day aerial war. Meanwhile, Israeli Prime Minister Benjamin Netanyahu declared his country was on the “path to victory.”
Adding to the market’s geopolitical backdrop, leaders of the Group of Seven (G7) nations convened their annual summit in Canada, discussing global economic and security issues.
U.S. stock index futures edged higher, while the dollar softened amid volatile trading. Investors are also keenly awaiting the conclusion of the Federal Reserve’s two-day policy meeting on Wednesday, where the central bank is widely expected to keep interest rates unchanged.
“At this stage, the Fed appears inclined to maintain current rates, given the significant economic uncertainties, including trade tensions and geopolitical risks,” Meger noted. “It wouldn’t be surprising if the Fed delays any rate cuts, essentially kicking the can down the road.”
Gold continues to be favored as a safe-haven asset amid geopolitical instability and inflation concerns. Additionally, low interest rates tend to support bullion prices since gold does not generate yield.
Other precious metals showed mixed movements: spot silver held steady at $36.33 per ounce, platinum rose 2% to $1,252.57, and palladium gained 0.8% to $1,036.10.
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