Gold Prices Retreat as Traders Take Profits After Recent Rally
June 16, 2025 — Gold prices witnessed a decline on Monday as traders moved to secure profits following a rally that brought prices to their highest point in nearly two months. This pullback comes in the wake of heightened geopolitical tensions in the Middle East, specifically the escalating conflict between Israel and Iran.
Gold Prices Drop After Hitting Recent Highs
As of 0634 GMT, spot gold fell by 0.5%, trading at $3,414.32 an ounce. Earlier in the session, gold had soared to a peak not seen since April 22. Similarly, U.S. gold futures reflected this downward trend, also down by 0.5% at $3,434.80. Market analyst Kelvin Wong from OANDA commented on the situation, stating, “It’s the joint political risk premium that’s rising due to the Iran-Israel conflict at this point that has boosted safe-haven demand for gold.” He further noted that the market has broken above the $3,400 level, indicating that a short-term uptrend remains intact. However, resistance is expected around $3,500, and there is potential for prices to breach this level and reach new highs.
Escalating Concerns in the Middle East
The recent dip in gold prices follows a weekend marked by renewed military actions between Israel and Iran, which resulted in civilian casualties and raised alarms about the potential for a wider conflict in the region. Both nations urged their respective civilian populations to take precautionary measures as tensions continue to escalate.
Former U.S. President Donald Trump commented on the ongoing situation, expressing hope for a diplomatic resolution while acknowledging that conflicts sometimes precede negotiations.
Central Bank Decisions on the Horizon
The gold market’s fluctuations are occurring against a backdrop of significant upcoming economic events, particularly the monetary policy decisions from various central banks. Investors are focusing on the U.S. Federal Reserve, which is scheduled to make an announcement on Wednesday. Analysts predict that the Fed will opt to keep interest rates steady, heightening market anticipation for potential rate cuts later in the year.
Futures markets currently suggest expectations for two rate cuts by the end of the year, which could begin as early as September. This sentiment has been bolstered by recent inflation data, indicating a more stable economic outlook.
Other Precious Metals on the Rise
While gold prices faced selling pressure, other precious metals showed positive movement. Spot silver edged up by 0.2%, reaching $36.36 per ounce. Platinum recorded a 1.5% increase, trading at $1,245.67, and palladium rose by 1.5% to $1,043.53. As the market continues to absorb the implications of geopolitical events and central bank policies, investors remain vigilant, strategizing for potential opportunities amidst the volatility.
Reporting by Brijesh Patel and Anmol Choubey in Bengaluru; Editing by Mrigank Dhaniwala, Rashmi Aich, and Sherry Jacob-Phillips.
This article is published by Smart Money Mindset, delivering timely updates on financial markets and economic trends.