Gold Prices Near Four-Week Low as Israel-Iran Truce Holds and PCE Inflation Report Looms
By Ayushman Ojha | Published June 27, 2025, 01:26 AM
Gold prices dipped to a near four-week low on Friday during Asian trading hours, pressured by easing geopolitical tensions between Israel and Iran alongside cautious anticipation ahead of a key U.S. inflation report. The recent truce between the two nations has softened demand for gold’s traditional role as a safe-haven asset, while investors eagerly await the May Personal Consumption Expenditures (PCE) price index—the Federal Reserve’s preferred gauge of inflation—for signals on the trajectory of future interest rate decisions.
Gold Price Movement
Spot gold fell 1% to $3,293.79 per ounce, marking its lowest level since June 2. Meanwhile, August gold futures declined 1.2% to $3,306.70 per ounce by early U.S. trading (01:15 ET / 05:15 GMT). The precious metal is on track to surrender more than 2% this week and has now declined nearly 6% from its all-time record highs reached in late April. This represents the second consecutive weekly loss for gold in a market that is recalibrating in response to shifting geopolitical and economic factors.
Geopolitical Developments Ease Safe-Haven Demand
A ceasefire agreement between Israel and Iran, brokered by U.S. President Donald Trump, appeared to hold throughout Thursday, reducing the geopolitical uncertainties that often drive investors toward gold as a protective asset. The easing of tensions in the Middle East has weakened gold’s safe-haven appeal, contributing to the recent price pullback.
This development has refocused attention on upcoming economic data, particularly the PCE price index for May, which markets view as a critical barometer for inflation and, consequently, monetary policy.
Inflation Data in Focus: PCE Price Index
Scheduled for release later on Friday, the PCE inflation report is expected to show a modest 0.1% monthly increase in both headline and core inflation measures. On an annualized basis, forecasts call for a 2.3% rise in the headline PCE and a 2.6% increase in core PCE, both indicating a slight acceleration compared to the previous year’s readings.
Federal Reserve Chair Jerome Powell recently testified before Congress, underscoring the central bank’s cautious stance on prematurely cutting interest rates. Powell highlighted concerns that inflationary pressures linked to tariffs may persist longer than anticipated, signaling that policymakers remain vigilant in their fight against inflation.
President Trump has been openly critical of Powell’s approach, suggesting he is considering “three or four people” to replace the Fed Chair. According to a Wall Street Journal report, a potential nomination for Powell’s successor could come as early as September.
Market Reaction: Dollar and Metals
The U.S. Dollar Index inched up 0.1% during Asian trading hours but remained close to a three-year low. A slightly stronger dollar can dampen demand for dollar-denominated commodities like gold by making them more expensive for foreign buyers.
Other precious metals also experienced declines: platinum futures dropped 1.3% to $1,392 per ounce but remain significantly higher—up 32% for the month from a more than decade-high. Silver futures slipped 0.6% to $36.38 an ounce. Meanwhile, copper futures were mixed, with London Metal Exchange copper declining 0.2% to $9,891.15 per ton and U.S. copper futures marginally higher at $5.06 per pound.
Summary
- Spot gold price declined 1% to $3,293.79, lowest since June 2
- August gold futures down 1.2% to $3,306.70 per ounce
- Israel-Iran ceasefire reduces geopolitical risk, weakening safe-haven demand
- U.S. May PCE inflation report expected to show modest increases; Fed cautious on rate cuts
- U.S. dollar edges up slightly; platinum and silver prices fall
- Gold on track for second consecutive weekly loss; down nearly 6% from April peak
As global markets digest easing geopolitical risks and await critical inflation data, gold prices remain vulnerable. Investors will closely monitor the PCE report for insight into inflation dynamics and the potential direction of U.S. monetary policy, factors that are likely to shape commodity markets moving forward.
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