Gold Stabilizes After Fed Shock.. US Decision on Iran Eases Markets

Gold prices witnessed stability during trading on Friday, June 20, but faced strong weekly pressures to hit their lowest levels since the beginning of the month, influenced by the Federal Reserve's tightening expectations of interest rate cuts, as well as the easing of geopolitical concerns after Washington postponed its decision to join any military action against Iran.

The White House decision, announced on Thursday, to postpone the United States' stance on the escalation between Israel and Iran for the next two weeks, led to market calmness and a decrease in demand for gold as a safe haven. Independent metals trader Tai Wong commented on the situation, saying: "Gold is stable as Trump backs off 'imminent' attack on Iran, all bad news seems to have dissipated for now," hinting at the possibility of the price dropping to $3250 per ounce.

Spot gold recorded $3369.63 per ounce, its lowest level since June 12, while gold futures fell by 0.7% to $3384.50. In a related context, silver dropped to $35.98 per ounce, marking a weekly decline, while palladium saw a slight increase despite its daily decline. Platinum, on the other hand, dropped significantly but maintained its upward trend for the third consecutive week.

On the other hand, the Fed kept interest rates unchanged, signaling a slowdown in expected rate cuts, which negatively affected the morale of the gold market. Analysts at ANZ Bank confirmed that economic factors, including the strength of the dollar and yield stability, were not supportive of gold prices, especially with reduced expectations of interest rate cuts due to the cautious stance of the Federal Reserve.

It is worth noting that US President Donald Trump reiterated on Thursday his desire to cut interest rates by 2.5 percentage points in an attempt to stimulate economic growth, but these calls did not prevent gold from facing selling pressures amid declining demand for it as a safe asset in the current circumstances.