AGE Daily Gold Update

AGE Daily Gold Update presents a recap on today's action in the precious metals markets. View archives.

4/22/2024: Gold drops as tensions cool

Source: Bill Musgrave, American Gold Exchange

Austin — New York spot gold fell 2.8% to close at a one-week low under $2,333 as Iran and Israel stepped back from the brink of a wider Middle East war, lifting risk appetite and stifling demand for safe havens. Silver shed 5.5% to $27.25 an ounce.

Following Israel's drone attack near Isfahan late last week, Iran downplayed the incident, saying the link to Israel has not been proven. The action came after Iran ineffectually fired hundreds of drones and missiles into Israel in retaliation for the recent killing of Iranian generals in Syria.

Rather than escalate the turmoil over Gaza into a direct military engagement, both Iran and Israel lowered the heat by these largely symbolic displays of force with no further actions threatened for now.

Investors cheered the reduction of tensions with a return to risk assets. The Dow and S&P 500 gained 0.8% and 1%, respectively, while the Nasdaq added 1.2%.

Benchmark 10-year Treasury yields crept higher as traders shifted out of sovereign debt. Higher yields tend to weigh on gold by increasing the opportunity cost for holding it instead of bonds. The dollar was essentially flat.

Worries about a possible expansion of the war in the Middle East helped elevate the gold price to all-time highs despite hotter-than-expected US economic data and increasingly hawkish signals from the Fed about interest rates. The cooling of the conflict served as an opportunity to take profits from this record run.

Investors now turn to Friday's release of the PCE index, the Fed's preferred inflation gauge. If the reading comes in softer than expected, the gold price could resume its climb. If inflation is stronger than expected some erosion in gold may occur, although demand for inflation hedges could offset it.

Platinum fell 1.3%, palladium 1%.

At the New York spot close: gold lost $66.20 to $2,332.20; silver shed $1.60 to $27.25; platinum dropped $11.80 to $923.60; and palladium slid $10.80 to $1,015.60 an ounce.