Gold fell 2% to hit an over two-week low on Tuesday as the announcement of a ceasefire between Iran and Israel dented safe-haven demand for bullion.

Spot gold fell 1.4% to $3,319.96 an ounce, as of 0146 p.m. EDT (1746 GMT), after earlier dropping over 2% to its lowest level since June 9.

U.S. gold futures settled 1.8% lower at $3,333.9.

"The de-escalation of tensions in the Middle East is the primary factor that's weighing on gold. The safe-haven bid has diminished and the market is in more of a risk-on mode," said Peter Grant, vice president and senior metals strategist at Zaner Metals.

"We've got pretty good support around $3,300 and then even better support probably at $3,250."

Global shares surged and the dollar dropped on Tuesday after news of the ceasefire between Israel and Iran, while markets shrugged off what U.S. President Donald Trump called violations by both sides.

Israeli Defence Minister Israel Katz had said earlier in the day that he had ordered the military to mount new strikes on targets in Tehran, in response to what he said were Iranian missiles fired in a "blatant violation" of the ceasefire.

"There's some questions about whether this ceasefire is going to hold ... until it really gets sorted out, I think the downside (for gold) is probably pretty limited," Grant added.
Meanwhile, U.S. Federal Reserve Chair Jerome Powell said in testimony prepared for delivery at a congressional hearing on Tuesday that the central bank needs more time to see if rising tariffs drive inflation higher, before considering interest rate cuts.

Markets are anticipating 50 basis-point rate cuts by year-end, starting in October with 25 basis points reduction.

Gold thrives in a low-rate environment as it is a zero-yielding asset.

Spot silver fell to its lowest since June 5, slipping 0.8% to $35.83 per ounce.
Platinum was up 1.6% to $1,314.91, while palladium lost 1.5% to $1,061.90.

Courtesy : Reuters