Gold prices fall back from record peaks after Trump eases Iran tensions and allays concerns about the Federal Reserve

Gold prices declined during Asian trading on Thursday following three days of record-breaking highs, as U.S. President Donald Trump softened his position on the unrest in Iran and Federal Reserve Chair Jerome Powell eased concerns, reducing the demand for gold as a safe haven.

Spot gold was last down 0.8% at $4,588.55 per ounce by 23:04 ET (04:04 GMT), while U.S. Gold Futures fell 0.3% to $34,594.10. In the previous session, gold reached a record peak of $4,642.72 per ounce.

Other precious metals experienced even sharper drops, with silver plunging nearly 6% to $87.74 per ounce and platinum prices falling 4% to $2,309.52 per ounce.

Gold retreats from highs as Trump adopts a milder approach toward Iran

The precious metal had climbed to consecutive record highs amid concerns that escalating unrest in Iran might provoke U.S. military intervention and destabilize the Middle East, along with worries about political pressure on the U.S. Federal Reserve.

Those fears subsided after President Trump indicated a softer approach toward Iran. He stated that he was reassured Iranian authorities would cease killing protesters and expressed his belief that there were no plans for large-scale executions at this time.

His remarks lowered the chances of an immediate U.S. military response to the protests against the government of Supreme Leader Ayatollah Ali Khamenei, easing the geopolitical tensions that had driven gold’s recent surge.

Trump states there is no intention to dismiss Fed Chair Powell.

Gold prices also came under pressure after Trump attempted to ease worries about the Federal Reserve. In an interview with Reuters, he stated that he had no plans to remove Federal Reserve Chair Jerome Powell, despite ongoing investigations, which helped to alleviate investor concerns about the independence of U.S. monetary policy.

The recent decline in gold was partly due to profit-taking following its rapid rise, which pushed prices well beyond key technical levels.

Despite Thursday’s drop, gold remained supported by expectations of U.S. interest rate cuts later this year, ongoing geopolitical tensions, and robust central bank purchases.

Lower interest rates generally benefit gold by decreasing the opportunity cost of holding a non-yielding asset.

Sources: Investing