Gold prices cool after rallying on increased geopolitical tensions, trade jitters

Gold prices fell in Asian trade on Tuesday, facing some profit-taking after heightened geopolitical tensions in Europe and the Middle East, along with persistent trade uncertainty, sparked strong gains.

Bullion prices started June on a strong note as Ukraine launched a deadly drone strike against Russia, largely undermining peace talks held on Monday. Moscow also showed little intent in reaching a lasting ceasefire.

Additionally, U.S.-Iran nuclear talks were seen breaking down as President Donald Trump said Tehran will not be allowed to enrich uranium. Gold had risen sharply on Monday, with persistent concerns over higher U.S. trade tariffs and worsening relations with China also driving demand for safe havens.

Spot gold fell 0.6% to $3,361.24 an ounce, while gold futures for August fell 0.4% to $3,384.92/oz by 00:32 ET (04:32 GMT). Spot gold had rallied over 2% on Monday.

Gold retreats amid profit-taking, dollar recovery

Gold and broader metal prices faced some pressure on Tuesday, from near-term profit-taking and as the dollar recovered marginally from recent losses.

The yellow metal still retained a bulk of its recent gains, especially as the Russia-Ukraine war showed few signs of ending soon. A potential breakdown in U.S.-Iran talks could also bode poorly for geopolitics in the Middle East, given that reports in May said Israel was planning to attack Iran if talks with the U.S. fell through.

Persistent concerns over U.S. trade tariffs and their economic impact also fueled gold demand, as did a recent sell-down in the bond market.

U.S. Treasuries and the dollar were battered by concerns over stretched U.S. debt levels, while focus was also on a controversial tax cut bill backed by Trump, which recently made progress in Congress.

The dollar recovered mildly from a six-week low on Tuesday, pressuring broader metal prices. Platinum futures fell 0.3% to $1,061.20/oz, while silver futures fell 1.1% to $34.323/oz.