Gold swings as traders track escalation of Israel-Iran conflict

Gold fluctuated as investors tracked hostilities in the Middle East, with Donald Trump playing down the prospects of a ceasefire between Israel and Iran.

Bullion traded near $3,390 an ounce in a choppy session. Asked aboard Air Force One what would be better than a ceasefire, Trump said: “An end. A real end.” The U.S. president continued to hammer the idea that Tehran is at fault for not having reached a deal that would have prevented Israel’s attacks.

“I told them to do the deal, they should have done the deal,” he said.

The precious metal advanced by almost 4% last week as Israel opened its military campaign against Iran’s nuclear program, sparking fears of a region-wide conflict and adding fresh impetus to a rally driven by the threat to global economic growth from Trump’s aggressive tariff agenda.

Price gains have been muted since then, even as Israel and Iran continue to strike at each other.

“At first sight, gold’s reaction may be surprising, considering the potential consequences of the conflict and also the typical skittishness of the more short-term-oriented traders in the market,” said Carsten Menke, head of next generation research at Julius Baer Group Ltd. “But a closer look suggests that it is in line with the historical pattern of such geopolitical shocks not lastingly lifting gold prices.”

Prices – about $120 short of a record hit in April – are on pace for a sixth monthly gain, which would be the best such run in more than two decades.

Spot gold was little changed at $3,385.47 an ounce as of 1:20 p.m. in London. The Bloomberg Dollar Spot Index was also flat. Silver, platinum and palladium gained.