Gold prices dropped in Asian trading on Monday as concerns over a potential conflict in the Middle East subsided, leading to a decrease in safe haven demand for the precious metal.
Traders were focusing on the upcoming 2024 presidential election in the United States, leading to a preference for the dollar. Additionally, political uncertainty in Japan following a recent election added to the flow of funds into the dollar.
Gold futures for December delivery fell 0.5% to $2,741.80 an ounce, while spot gold dropped 0.7% to $2,729.65 an ounce by 00:11 ET (04:11 GMT).
Middle East Tensions Ease After Israeli Strike
Concerns over a potential conflict in the Middle East decreased after Israel did not carry out an attack on Iran’s oil and nuclear facilities over the weekend. While Iran threatened retaliation, its leaders minimized the impact of the Israeli strike.
The uncertainty surrounding Israel’s previous attack on Iran had driven safe haven demand for gold in the past month, with the precious metal still near recent highs.
With the U.S. presidential election adding to global uncertainty, safe haven demand is expected to rise, although the dollar is currently benefiting more from this uncertainty.
Copper Prices Retreat Amid Economic Data Focus
Copper prices also fell on Monday as attention shifted to upcoming economic data releases. Benchmark copper on the London Metal Exchange dropped 0.6% to $9,520.50 a ton, while December copper fell 0.7% to $4.3373 a pound.
Traders were disappointed by China’s stimulus measures, leading to steep losses in copper prices throughout November. Economic data from China and the U.S., including GDP figures and inflation data, are expected to provide more insight into the market direction.