Jason Scott and Yvonne Yue Li

Mon, Jun 16, 2025, 8:11 AM2 min read

(Bloomberg) -- Gold edged lower, erasing gains made earlier in the day, as fears subsided that Israel’s war against Iran would drag in other countries.

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The precious metal fell on Monday to trade close to $3,390 an ounce, about $110 short of an all-time peak set in April. Israel and Iran exchanged fire for the fourth consecutive day on Monday. Markets calmed as fears of a regional war decreased, with Tehran signaling it wants to deescalate hostilities with Israel and is willing to resume nuclear talks with the US, the Wall Street Journal reported.

“The volatility has receded somewhat today as investors are in wait-and-see mode,” said Ed Meir, a consultant at Marex Capital Markets.

The sudden upsurge of geopolitical risk helped gold gain 3.7% last week, adding fresh impetus to a rally driven by the threat to global economic growth from President Donald Trump’s aggressive tariff agenda.

Gold has risen around 30% in 2025, with central banks diversifying away from the dollar another significant driver.

“Prices are still very close to the record, and given the geopolitical situation any further escalation will push them higher,” said John Feeney, an analyst at Guardian Gold Australia. “Gold has performed very well as a haven recently, and it seems a lot of investors are moving funds out of US bonds and into the metal over the longer term.”

Investors forecast the US dollar sliding further, according to a survey by Bank of America Corp. Short US dollar is currently both the most crowded trade and the highest conviction trade, according to the responses of 50 fund managers. Dollar weakness is good for gold, making it more affordable for buyers in different currencies.

Spot gold dipped 0.89% to $3,401.96 an ounce as of 11:11 a.m. in New York. The Bloomberg Dollar Spot Index slipped 0.2%. Silver, platinum and palladium all advanced.

--With assistance from Jack Ryan.

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