Gold (^XAU) is under pressure Tuesday as investors rotate out of safe-haven assets and back into risk assets. After touching on all-time highs earlier in this year, spot gold is sliding about 0.9% today to nearly $4,778 per ounce while U.S. gold futures for June delivery fell 0.7% to around $4,798. The catalyst is a potential peace deal between the United States and Iran, which has cooled demand for the metal that surged during the conflict. The SPDR Gold Shares (NYSEARCA:GLD | GLD Price Prediction) ETF slipped 0.79% on the day, though it remains up nearly 12% year to date. Earlier this year, gold (^XAU) was trading above the $5,100/ounce level amid a wider precious metal rally in which silver prices were similarly clinching record highs as investors were rushing into safe-haven assets. Barrick Mining (NYSE: B) stock is down 1.4% today but has soared over 111% over the past one-year stretch.
Iran Deal Optimism Drains Safe-Haven Demand
President Trump stated that Vice President JD Vance is prepared to travel to Islamabad for a second round of talks with Iran, with a two-week ceasefire set to expire Wednesday evening Washington time. The U.S. expressed confidence that peace talks would go ahead in Pakistan, and a senior Iranian official said Tehran was considering joining. That diplomatic optimism has pushed oil prices lower on expectations of restored Gulf supply and drained the urgency from gold’s safe-haven bid.
A firming U.S. dollar compounds the pressure. Because gold is priced in dollars, a stronger greenback makes the metal more expensive for buyers in other currencies, suppressing demand. Silver is also under pressure, trading at around $78 and down 1%, while platinum lost 0.7% to around $2,074, confirming the selloff is broad across precious metals.
The Structural Backdrop
Today’s dip fits a larger pattern. Gold has dropped around 8% since the Middle East conflict began on February 28, a counterintuitive result explained by the nature of the shock. Unlike a demand shock, which pushes real yields lower and lifts gold, this energy supply shock drove oil prices higher and raised inflation expectations, pushing real yields up. Morgan Stanley recently cut its second-half 2026 gold target to $5,200 per ounce, identifying Fed rate cuts as the key catalyst for recovery. The bank’s economists forecast two 25 basis point cuts in September and December 2026, which they expect to revive ETF buying as real yields decline.
The broader market reflects the same risk-on shift. The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is up about 3% over the past week and more than 9% over the past month. The VIX has fallen from a recent peak of around 31 to roughly 17.5, signaling that institutional hedging demand has cooled sharply.
What to Watch
Gold’s direction this week hinges on whether U.S.-Iran talks produce a credible framework. A confirmed second round would likely extend the selloff toward the $4,750 support level Vawda flagged. Monitor the Senate confirmation hearing for Fed Chair nominee Kevin Warsh, scheduled to begin at 10 a.m. EDT Tuesday. Any signal that Warsh would tighten policy faster than expected would reinforce the high-real-yield environment that has weighed on gold all year.
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