Gold Prices Decline Amid Easing Middle East Tensions

Gold prices fell from near record highs in Asian trade on Monday as easing concerns over a larger conflict in the Middle East dented the safe haven demand for the yellow metal.

Traders were largely biased towards the dollar in anticipation of the 2024 presidential election, now just a week away. Flows into the dollar were also spurred by expectations of increased political uncertainty in Japan, after a coalition led by the ruling Liberal Democratic Party lost its parliamentary majority in a weekend election.

Spot gold fell 0.7% to $2,729.65 an ounce, while gold futures expiring in December fell 0.5% to $2,741.80 an ounce by 00:11 ET (04:11 GMT).

Middle East Fears Ease After Israeli Strike

Concerns over a larger conflict in the Middle East eased after Israel did not attack Iran’s oil and nuclear facilities over the weekend. While Tehran did threaten retaliation, Iranian leaders downplayed the impact of the strike.

Fears regarding Israel's attack on Iran—over an early-October strike—had been a key uncertainty for markets, especially due to worries that any damage to Iran’s oil or nuclear infrastructure would escalate the conflict.

This situation had fueled safe haven demand for gold over the past month, though the yellow metal remains near recent peaks.

Increased uncertainty surrounding the U.S. presidential election is also expected to bolster safe haven demand, especially with polls indicating a tight race between Donald Trump and Kamala Harris. However, the dollar appears to be benefiting more from this uncertainty.

Other precious metals fell amid a stronger dollar. Platinum futures fell 0.8% to $1,026.90 an ounce, while silver futures dropped 1% to $33.435 an ounce.

Copper Retreats with Economic Cues Ahead

Among industrial metals, copper prices fell on Monday as attention turned to key economic readings due this week. Benchmark copper futures on the London Metal Exchange fell 0.6% to $9,520.50 a ton, while December copper futures fell 0.7% to $4.3373 a pound.

The red metal suffered steep losses through November, as traders expressed disappointment over recent stimulus measures in top copper importer China. Data released over the weekend showed China’s industrial profits fell sharply in September, with purchasing managers index data for October scheduled for release later this week for further insights.

Gross domestic product data from the U.S. and eurozone, along with the PCE price index data— the Federal Reserve’s preferred inflation gauge—are also set to be released this week.